User Account

All Pages

List the performance obligations

Assignment Help Accounting Basics
Reference no: EM133070703

Question - Brooklyn Inc. buys and sells swim spas that are used in homes across Ontario. The company follow ASPE. Unit selling prices range from $40,000 to $80,000.

Brooklyn Inc. sells a swim spa to the Lee family on April 15th, 2021. The selling price for this particular swim spa is usually $70,300.

Brooklyn Inc. will also install the machine. The estimated fair value of installing the swim spa is $3,700.

Brooklyn Inc. sold the swim spa and installation to the Lee family for $65,000. The swim spa cost Brooklyn Inc. $32,000.

The Lee family is obligated to pay Brooklyn Inc. $20,000 upon delivery of the swim spa and the balance on June 1st.

Brooklyn Inc. delivers the swim spa on May 1st, 2021, and completes the installation of the swim spa on May 20th, 2021.

On June 1st the Lee family informs Brooklyn Inc. that they will be not be able to pay their account that is due. The two parties enter into an agreement that the account will be converted into a non-interest bearing promissory note to be repaid in one year from now. Brooklyn Inc. borrows funds at a rate of 4%. Lee family has various loans at 6% interest. The company's year-end is December 31st.

Required -

1. List the performance obligations?

2. Explain when the revenue should be recognized for each performance obligation under ASPE. Support your answer by explaining why it should be recognized at the time you selected. Hint use RCMP for criteria.

3. Prepare the journal entries for 2021 and 2022. If there is no entry be sure to state no entry. Hint remember to allocate the revenue among the different performance obligations and then use this information when you prepare the journal entries. In your answer do not use the account "discount on notes".

4. If the company followed IFRS when should the revenue be recognized for the sale of the swim spa and why? List the criteria and apply it to the question.

Reference no: EM133070703

Questions Cloud

Cyber vulnerabilities and impact : Read the Cyber Vulnerabilities section in Chapter Cyber Vulnerabilities and Impact and write about how cyber attackers can exploit that vulnerability
Describe housing-related goal : Describe a housing-related goal that you may have for yourself. What are some of the key issues a first-time homebuyer should consider?
How much money does Ian save per month : The purchase option requires a loan of $100,000 for a 20 year term at a 4.9% interest rate. How much money does Ian save per month
About saving and investing as two separate steps : Economists talk about saving and investing as two separate steps. After an individual has saved some money, it's time to decide on investments.
List the performance obligations : Brooklyn Inc. will also install the machine. The estimated fair value of installing the swim spa is $3,700. List the performance obligations
Critical components for information security : Critical Components for Information Security - What are critical components for information security
Insurance companies willingly take on our risks : Insurance companies willingly take on our risks for a fee. Give an example of a risk that you or someone else has chosen to insure.
Purchase an asset at a specified price : 1. Long-term debt issued by either the government or a corporation that pays fixed payments based on a preset schedule is called a(n):
Capital punishment by religious leaders for several decades : Christians are to call out against capital punishment by religious leaders for several decades.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd