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Contract Costs nousaithe D8200) 24. On December 1, 2020, Westin Co. enters into a two-year contract with a customer where outside attorney costs of $4,800 to establish the contract were incurred. The amount is due in 60 days. Westin Co. expects to recover the legal fees from the amounts billed on the contract. The contract does not have a renewal option. How would Westin account for the contract cost in its year-end financial statements dated December 31, 2020, assuming that payment was not made to the attorneys by this date? OBRASE Westin Co. would recognize an asset (Contract Cost) of $4,600 and a liability (Accrued Legal Expense) of $4,800, on December 31, 2020, and expense (Contract Cost Expense) of $200 for the year 2020. B. Westin Co. would recognize an asset (Contract Cost) of $4,400 and a liability (Accrued Legal Expense) of $4,800, on December 31, 2020, and expense (Contract Cost Expense) of $400 for the year 2020. Westin Co. would recognize an asset (Contract Cost) of $4,800 and a liability (Accrued Legal Expense) of $4,800, on December 31, 2020. D. Westin Co. would recognize a liability (Accrued Legal Expense) of $4,800, on December 31, 2020, and expense (Contract Cost Expense) of $4,800 for the year 2020. A. C.

Contract Costs 24. On December 1,2020, Westin Co. enters into a two-year contract with a customer where outside attorney costs of $4,800 to establish the contract were incurred. The amount is due in 60 days. Westin Co. expects to recover the legal fees from the amounts billed on the contract. The contract does not have a renewal option. How would Westin account for the contract cost in its year-end financial statements dated December 31,2020 , assuming that payment was not made to the attorneys by this date? A. Westin Co. would recognize an asset (Contract Cost) of $4,600 and a liability (Accrued Legal Expense) of $4,800, on December 31, 2020, and expense (Contract Cost Expense) of $200 for the year 2020. B. Westin Co. would recognize an asset (Contract Cost) of $4,400 and a liability (Accrued Legal Expense) of $4,800, on December 31,2020, and expense (Contract Cost Expense) of $400 for the year 2020. C. Westin Co. would recognize an asset (Contract Cost) of $4,800 and a liability (Accrued Legal Expense) of $4,800, on December 31, 2020. D. Westin Co. would recognize a liability (Accrued Legal Expense) of $4,800, on December 31, 2020, and expense (Contract Cost Expense) of $4,800 for the year 2020

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