Reference no: EM132652265
Questions -
Q1. BOLICK Telecommunication Corporation agrees to sell CJP Company voice minutes over a period of one year. CJP Company promises to pay P 0.20 per minute for the first 100,000 minutes. If the minutes purchased exceeded 100,000 minutes, then the price falls to P 0.15 per minute for all minutes purchased. If the price exceeded 150,000 minutes, then the price falls to P 0.10 per minute for all purchased. In effecting the agreement, price shall be reduced retrospectively. Based on BOLICK's experience with similar agreements, it estimates the following outcome:
Less than 100,000 minutes 60%
100,000 up to 150,000 minutes 30%
Exceeding 150,000 minutes 10%
What is the estimated transaction price under expected value method?
a. P 0.20 per minute
b. P 0.175 per minute
c. P 0.15 per minute
d. P 0.125 per minute
Q2. BLATCHE Company enters into business with GILAS Corporation to build a call center. BLATCHE Company will receive payment of P 150,000 if competed on time or P 110,000 if completion is delayed BLATCHE estimated the following with respect to timely completion of the asset:
Call center is completed within time agreed, hence, no delay 95%
Call center is completed but with delay as to turnover 5%
What is the estimated transaction price?
a. P 110,000
b. P 130,000
c. P 148,000
d. P 150,000
Q3. On January 5, 2018, BALDWIN Company enters into a cancellable contract to transfer product G to Mr. Guiao on April 5, 2018. The contract requires that Mr. Guiao pay consideration of P 2,000 in advance on January 15, 2018. Mr. Guiao pays the consideration on March 5, 2018. Then BALDWIN delivered the product on March 31, 2018.
1. What is the entry on January 15, 2018 when payment of the contract is due?
a. Receivable 2,000
Contract Liability 2,000
b. Receivable 2,000
Revenue 2,000
c. Contract Liability 2,000
Revenue 2,000
d. No Entry
2. What is the entry to record the receipt of cash of P 2,000 on March 5, 2018?
a. Cash 2,000
Revenue 2,000
b. Cash 2,000
Receivable 2,000
c. Receivable 2,000
Revenue 2,000
d. Cash 2,000
Contract Liability 2,000
3. What is the entry on March 31, 2018 to record satisfaction of performance obligation?
a. Cash 2,000
Receivable 2,000
b. Receivable 2,000
Revenue 2,000
c. Contract Liability 2,000
Revenue 2,000
d. No Entry
Q4. On January 5, 2018, GOBERT Company enters into a non-cancellable contract to transfer beauty products to Donovan on April 5, 2018. The contract requires that Donovan pay consideration of P 2,000 in advance on January 15, 2018 Donovan pays the consideration on March 5, 2018. Then GOBERT Company transferred the product on March 31, 2018.
1. What is the entry on January 15, 2018 when payment of the contract is due?
a. Receivable 2,000
Contract Liability 2,000
b. Receivable 2,000
Revenue 2,000
c. Contract Liability 2,000
Revenue 2,000
d. No Entry
2. What is the entry to record the receipt of cash of P 2,000 on March 5, 2018?
a. Cash 2,000
Revenue 2,000
b. Cash 2,000
Receivable 2,000
c. Receivable 2,000
Revenue 2,000
d. Cash 2,000
Contract Liability 2,000
3. What is the entry on March 31, 2018 to record satisfaction of performance obligation?
a. Cash 2,000
Receivable 2,000
b. Receivable 2,000
Revenue 2,000
c. Contract Liability 2,000
Revenue 2,000
d. No Entry