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    cecillia lissawati
    On June 15, 2019, Cosmo delivers a product to Greig and recognizes $2,000 in revenue. Cosmo invoices Greig for $2,000 and records $1,300 in cost of goods sold. On July 15, 2019, Cosmo receives a $2,000 cash payment from Greig and records it against the receivable.

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    Forum 6

    Uploaded by

    cecillia lissawati
    256 views1 page
    On June 15, 2019, Cosmo delivers a product to Greig and recognizes $2,000 in revenue. Cosmo invoices Greig for $2,000 and records $1,300 in cost of goods sold. On July 15, 2019, Cosmo receives a $2,000 cash payment from Greig and records it against the receivable.

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    On June 15, 2019, Cosmo delivers a product to Greig and recognizes $2,000 in revenue. Cosmo invoices Greig for $2,000 and records $1,300 in cost of goods sold. On July 15, 2019, Cosmo receives a $2,000 cash payment from Greig and records it against the receivable.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    256 views1 page

    Forum 6

    Uploaded by

    cecillia lissawati
    On June 15, 2019, Cosmo delivers a product to Greig and recognizes $2,000 in revenue. Cosmo invoices Greig for $2,000 and records $1,300 in cost of goods sold. On July 15, 2019, Cosmo receives a $2,000 cash payment from Greig and records it against the receivable.

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    © All Rights Reserved
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    of 1

    No entry is required on May 10, 2019, because neither party has performed under the contract

    and either party may terminate the contract without compensatory damages. On June 15,
    2019, Cosmo delivers the product and therefore should recognize revenue as Cosmo satisfies
    its performance obligation by delivering the product to Greig.
    The journal entry to record the sale and related cost of goods sold is as follows.
    June 15, 2019
    Accounts Receivable ............................................................ 2,000
    Sales Revenue ............................................................. 2,000

    Cost of Goods Sold .............................................................. 1,300


    Inventory ....................................................................... 1,300

    After receiving the cash payment on July 15, 2019, Cosmo makes the following entry.
    July 15, 2019
    Cash ..................................................................................... 2,000
    Accounts Receivable .................................................... 2,000

    Geraths Windows manufactures and sells custom storm windows for three-season
    porches. Geraths also provides installation service for the windows. The installation
    process does not involve changes in the windows, so this service can be performed by
    other vendors. Geraths enters into the following contract on July 1, 2015, with a local
    homeowner. The customer purchases windows for a price of $2,400 and chooses
    Geraths to do the installation. Geraths charges the same price for the windows
    irrespective of whether it does the installation or not. The price of the installation service
    is estimated to have a fair value of $600. The customer pays Geraths $2,000 (which
    equals the fair value of the windows, which have a cost of $1,100) upon delivery and the
    remaining balance upon installation of the windows. The windows are delivered on
    September 1, 2015, Geraths completes installation on October 15, 2015, and the
    customer pays the balance due. Prepare the journal entries for Geraths in 2015.

    Date Account Titles and Explanation Debit Credit


    July 1, 2014 No Entry
    No Entry
    September 1, 2014 Cash 2,000
    Accounts Receivable 800
    Unearned Service Revenue 573
    Sales Revenue 1457
    (To record delivery and installation expenses)
    Cost of Goods Sold 1,200
    Inventory 1,200
    (To record cost of goods sold)
    October 15, 2014 Cash 430
    Unearned Service Revenue 573
    Service Revenue 573
    Accounts Receivable 430

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