Unearned Revenue and Customer Deposits

On November $20,2023,$ Green Bay Electronics agreed to manufacture and supply $500$ electronic control units used by Wausau Heating Systems in large commercial and industrial installments. On that date, Wausau deposited $$480$ per unit upon signing the $3-$year purchase agreement, which set the selling price of each control unit at $$1,530.$ Green Bay$$s inventory cost is $$300$ per unit. No units were delivered during $2023.$ The first $100$ units will be delivered in $2024,150$ units will be delivered during $2025,$ and the remaining units will be delivered during $2026.$ Assume Green Bay uses a perpetual inventory system, and Wausau pays in cash upon delivery of units for amounts not covered by the deposit.

Required:

Question Content Area

$1.$ Conceptual Connection: Prepare the entry by Green Bay to record receipt of the deposit during $2023.$ If an amount box does not require an entry, leave it blank.

Nov. $20$

$($Record receipt of deposit for merchandise not yet delivered$)$

Question Content Area

How would the deposit be reported in the financial statements at the end of $2023?$

The portion of customer deposits pertaining to next year$$s deliveries should be classified as a

on the balance sheet at the end of $2024$; the remainder should be classified as a

$.$

Question Content Area

$2.$ Conceptual Connection: Prepare the entry by Green Bay to record the delivery of $100$ units during $2024.$ If an amount box does not require an entry, leave it blank.

$2025$

$($Record recognition of revenue$)$

$2025$

$($Record delivery of merchandise$)$

Question Content Area

How would the deposit be reported in the financial statements at the end of $2024?$

The amount that pertains to next year$$s deliveries and would be reported as a

on the balance sheet at the end of $2025,$ while the remainder would be classified as a

$.$

Question Content Area

$3.$ Prepare the entry by Green Bay to record the delivery of $150$ units during $2025.$ If an amount box does not require an entry, leave it blank.

$2026$

$($Record recognition of revenue$)$

$2026$

$($Record delivery of merchandise$)$