SoccerHawk Merchandise Inc. enters into a 6-month contract to sell soccer balls to City Soccer. The contract contains the following price scale:

Sales Volume	Price per Soccer Ball
First 300 soccer balls sold	$22
Next 200 soccer balls sold	19
Next 250 soccer balls sold	17
Additional soccer balls sold	15

On the date the contract is signed, SoccerHawk estimates based on past experience that there is a 20% chance it will sell 450 soccer balls, a 45% chance it will sell 600 soccer balls, and a 35% chance it will sell 800 soccer balls.

The company sells the following soccer balls during the 6-month contract:

	Number of Soccer Balls
Month 1	155
Month 2	60
Month 3	125
Month 4	75
Month 5	85
Month 6	60
Total sales	560	balls

Required:

1.	On the date that the contract is signed should SoccerHawk make a journal entry? Why or why not?
2.	Determine the transaction price that SoccerHawk should use when recording monthly revenue.
3.	Prepare the journal entries for SoccerHawk assuming that City Soccer pays the amount due at the end of each month based on the sales to date.

1. On the date that the contract is signed should SoccerHawk make a journal entry? Why or why not?

yes

no

Points:

1 / 1

Which sentence supports your answer? Check all that apply.

This contract is an agreed upon contract on the date the contract is signed and the seller has agreed to transferred goods or services for consideration in exchange for the promised goods or services. Thus, accounting is required to record the agreement.

This contract is a wholly unperformed contract on the date the contract is signed as the seller has not transferred goods or services nor has it received consideration in exchange for the promised goods or services. Thus, no accounting is required until performance occurs.

Points:

1 / 1

2. Determine the transaction price that SoccerHawk should use when recording monthly revenue.

Additional Instruction

Transaction price per soccer ball?

3. Prepare the journal entries for SoccerHawk assuming that City Soccer pays the amount due at the end of each month based on the sales to date.

General Journal Instructions

How does grading work?

PAGE 1

GENERAL JOURNAL

Score: 184/223

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1		Cash		3,m410.00
2		Sales Revenue			3,160.45
3		Unearned Revenue			249.55
4		Cash		1,320.00
5		Sales Revenue			1,223.40
6		Unearned Revenue			96.60
7		Cash		2,630.00
8		Sales Revenue			2,548.75
9		Unearned Revenue			81.25
10		Cash		1,425.00
11		Unearned Revenue		104.25
12		Sales Revenue			1,529.25
13		Cash		1,615.00
14		Unearned Revenue		118.15
15		Sales Revenue			1,733.15
16		Cash		1,105.00
17		Unearned Revenue		205.00
18		Sales Revenue			1,310.00

Points:

34.65 / 42

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Check My Work

When a contract contains an uncertain, variable amount of consideration, GAAP requires that a company only recognize total consideration in an amount the seller expects to receive when the uncertainty is resolved.

(Please Help!! Anything with a checkmark by it is correct. Anything without a checkmark is wrong.)