Reference no: EM132532504

Whitecap Vessels Inc. designs and builds ships specialized to service offshore oil platforms in Canada. The company, which is publicly traded, has an October 31 year end. On March 15, 2020, Whitecap signed a contract with OS Resources Ltd. to design and build 10 support ships for their operations. At the signing ceremony, officials from both companies sign a contract for $11M. The design component of the contract would be valued $2M if separate, while the manufacturing would be valued at $1M per ship if separate. Whitecap agreed to provide a two-year, assurance type warranty for the trains and estimates claims will be $500,000 based on experience. OS agreed to pay $5.1M within 14 days of signing, and to pay the balance within 45 days of ships receiving final approval and certification from the transportation safety board (TSB). OS paid the deposit on March 29. On May 9, Whitecap's engineers complete the ship design and the design was approved by all parties including the TSB

• On August 1, Whitecap completed construction of 10 ships, and completed delivery to the OS dock one month later. On September 30, OS received final approval from the TSB for the ships and made their final payment of the balance owing to Whitecap on November 15

Question 1: Determine when and how much revenue Whitecap would be able to recognize for the year ended October 31, 2020. Based on your analysis of revenue recognition above, answer all the journal entries required by Whitecap. If no entry is required, please explain why.