s ao 2 Franiuk Hotctogs and Grill normalily seills hotdogs for $2.00 but also t-shirts shirts havent been selling that well lately, so Franiuk has decided to sell a with the name s and its logo prominently displayed for $10. The t combination of the t-shirt for $10 with a free hot dog. Donovan buys the combination of the t-shirt and hot dog for $10 in cash. How should Franiuk account for the A tor thehld recognize s10 revenue, comprised of $10 for the ishirt and B. Franiuk should C. Franiuk should D. Franiuk should for the hot dog, and $2 for discount expense for the hot dog and $2 as a liability and $1.67 for the hot dog. recognize $12 revenue, comprised of $10 for the t-shirt, $2 recognize $12 revenue, comprised of $10 for the t-shirt, $2 venue, comprised of $8.33 for the t-shirt recognize $10 re (LO 2) which of the following is not a condition in the determination of when a contract exists: 6. valid A. The contract has to be in writing B. The payment terms are identified. C. The parties have approved the contract D. It is probable that the consideration will be collected 7. (L.O. 2) On April 4, Rudek Company enters into a contract to transter a product to Gwinner Company on June 12. The contract is modified on May 6 with the price terms changing and transfer of the product changed to June 22. The modified contract is structured such that Gwinner is required to pay the full contract price of $3,500 on July 10. The cost of goods transferred is $2.700. Rudek delivers the product to Gwinner on June 22. When should Rudek recognize revenue on the transaction A. Rudek should recognize revenue on April 4 only. B. Rudek should recognize revenue on April 4, but then enter an adjusting entry to reflect the modified contract terms on May 6 C. Rudek should recognize revenue on June 22. D. Rudek should recognize on July 10 (L.O. 2) Which of the following is false concerning the identification performance obligations? of separate A. When two goods are not distinct within a contract, a company should still separate them into distinct performance obligations because products should never be combined and reported as one performance obligation. To determine whether a company has to account for multiple performance obligations, the company's promise to sell the good or service to the customer must be separately identifiable from other promises with the B. contract. combine and report them as one performance obligation. from a good or service on its own or together with other readily available C. When two goods are not distinct within a contract, a company should D. A product or service is distinct when a customer is typically able to benefit resources