Reference no: EM132890233
Problem - Variable Consideration and Performance Obligations Satisfied over Time - On January 2, 2019, TI enters into a contract with Drewry Corp. to build a new piece of equipment. The contract price is $3 million, and construction is expected to take 18 months. Drewry is billed and pays $1,500,000 of the contract price on January 2, 2019, and will pay the balance at completion.
TI estimates that the cost of construction will be $2.2 million.
Drewry includes two performance bonuses in the contact:
U.S. Bonus: If the equipment design receives a U.S. patent by March 15, 2020, Drewry will pay a $300,000 bonus.
International Bonus: If the equipment receives approval for international distribution by January 31, 2020, Drewry will pay a $1,000,000 bonus.
The bonuses are payable when a U.S. patent is approved and when international distribution is approved.
On the date the contract is signed, IT estimates that there is an 80% chance it will receive U.S. patent protection by March 15, 2020, but only a 30% chance that the equipment will be approved for international distribution.
TI received a U.S. patent on the equipment design on November 15, 2019, and immediately billed Drewry and received its bonus payment. On December 31, 2019, TI has incurred $1,760,000 of contract costs and is 80% complete. TI won approval for international distribution on January 15, 2020, and completed the equipment project on April 15, 2020, at a cost of $2,200,000.
Required -
1. Identify the performance obligations in the contract.
2. Provide the journal entries that TI should make to recognize revenue from the contract.
Determine the transaction price of the Osgilith MRI machines
: Determine the transaction price of the Osgilith MRI machines, and discuss how Palantir would account for the sales commission
|
What is the expected value of investment
: There is an athletic organization named Jingle Jangle plans to invest P1,000,000 to host soccer game. They expect to sell tickets worth P1,500,000 .However, if
|
What you know about iron supplements
: What you know about iron supplements. Consider how to take them, side effects, etc.
|
Strengths and weaknesses in implementing hr functions
: Discuss strengths and weaknesses in implementing HR functions 1) health and safety2) employee management relations
|
Provide the journal entries that TI should make
: TI estimates that the cost of construction will be $2.2 million. Provide the journal entries that TI should make to recognize revenue from the contract
|
Identify the factors that most strongly influence hr
: Discuss how international operations impact human resource practices including workforce planning, selection, training and development, performance management,
|
Analyzing a local company and its hr processes
: Please, present a research project that applies all HR concepts covered by analyzing a local company and its HR processes.
|
Analysing the four levels of the bsc
: By analysing the four levels of the BSC offer other models for shop floor staff, managers and directors, suggesting the advantage that they would have over the
|
Prepare Fore-Runner journal entries to record revenue
: Assume 30, 20, and 30 watches were delivered in January, February, and March, respectively. Prepare Fore-Runner's journal entries to record revenue
|