THE PROBLEM COMES AS IT IS, I'VE INCLUDED EVERYTHING PRESENTED
Flint Ranch & Farm is a distributor of ranch and farm equipment. Its products range from small tools, power equipment for trench- digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalog and Internet site. However, given some of its specialty products, select farm implement stores carry Flint's products. Pricing and cost information on three of Flint's most popular products are as follows. Item Standalone Selling Price (Cost) Mini-trencher $3,400 ($2,200) Power fence hole auger 1,300 (800) Grain/hay dryer 14,000 (11,300) Respond to the requirements related to the following independent revenue arrangements for Flint Ranch & Farm. On January 1, 2020, Flint sells 30 augers to Mills Farm & Fleet for $39,000. Mills signs a 6-month note at an annual interest rate of 12%. Flint allows Mills to return any auger that it cannot use within 50 days and receive a full refund. Based on prior experience, Flint estimates that 5% of units sold to customers like Mills will be returned (using the most likely outcome approach). Flint's costs to recover the products will be immaterial, and the returned augers are expected to be resold at a profit. Prepare the journal entry for Flint on January 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) On August 10, 2020, Flint sells 15 mini-trenchers to a farm co-op in western Minnesota on account. Flint provides a 4% volume discount on the mini-trenchers if the co-op has a 15% increase in purchases from Flint compared to the prior year. Given the slowdown in the farm economy, sales to the co-op have been flat, and it is highly unlikely that the benchmark will be met. Prepare the journal entry for Flint on August 10, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter Ofor the amounts.) Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) Flint sells three grain/hay dryers to a local farmer at a total contract price of $45,400. In addition to the dryers, Flint provides installation, which has a standalone selling price of $1,100 per unit installed. The contract payment also includes a $1,200 maintenance plan for the dryers for 3 years after installation. Flint signs the contract on June 20, 2020, and receives a 20% down payment from the farmer. The dryers are delivered and installed on October 1, 2020, and full payment is made to Flint. Prepare the journal entries for Flint in 2020 related to this arrangement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry"for the account titles and enter Ofor the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Jun. 20, 2020 (To record payment received) (To record sales) 1 (To record cost of goods sold) On April 25, 2020, Flint ships 110 augers to Farm Depot, a farm supply dealer in Nebraska, on consignment. By June 30, 2020, Farm Depot has sold 50 of the consigned augers at the listed price of $1,300 per unit. Farm Depot notifies Flint of the sales, retains a 10% commission, and remits the cash due Flint. Prepare the journal entries for Flint and Farm Depot for the consignment arrangement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Entries for Flint Jun 30, 2020 (To record payment received) (To record cost of sales) Entries for Farm Depot (To record consignment sales) (To record payment)
