Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. justkitchens inc. provides services to restaurants

JustKitchens Inc. provides services to restaurants and hotels. The company supplies paper products,...

90.2K

Verified Solution

Question

Accounting

image

JustKitchens Inc. provides services to restaurants and hotels. The company supplies paper products, tableware, cookware, restaurant and kitchen equipment, and cleaning supplies. On January 2, 2017, Just- Kitchens enters into a contract with a local restaurant chain to provide its services for 3 years at a cost of $10,000 per year. The restaurant chain pays the total contract fee on January 2, 2017. JustKitchens's stand-alone selling price is also $10,000 per year. agreed to by After 2 years, the restaurant asks to modify the contract. On January 2, 2019, the companies agree to reduce the fee for the third year to $9,000 in exchange for extending the contract for 2 additional years at a fee of $11,000 per year. This modification both parties, and on that date the restaurant chain pays for the additional 2 years of service and deducts $1,000 for the adjustment to the original contract. The $11,000 fee for the additional years is the same as JustKitchens's stand-alone price. Required: 1. How should JustKitchens account for the contract modification? 2. Prepare the journal entries that JustKitchens would make over the life of the contract

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

Define these terms: [ Note: *Singular: (-ium); plural: (-ia)] Haplodiplontic Tracheid Exant* Sporangia* Gametangia* Archegonia* Antheridia* Strobili Sporophyll

Psychology
1.2K views

Discuss the comparative advantages and disadvantages of using focus groups versus in-depth interviews.

Psychology
1.2K views

The phrase communication constitutes organizations comes out of the socio-cultural tradition. First, use the terminology from this...

Electrical Engineering
1.2K views

Describe the development methodology and processes of (Model View Controller ) and explain how you would...

Physics
1.2K views

A 1000 kg truck is moving at 30 m/s and hits a 500 kg car...

Geometry
1.2K views

cos u sin 2u cos 2u tan 2u 336 125 73 24 25 25 336...

Statistics
1.2K views

of drivers states that A 95 confidence interval for the mean time it takes for...

Accounting
1.2K views

List 10 examples of analytical procedures

Accounting
1.2K views

The stockholders' equity accounts of Skysong, Inc. on January 1, 2022, were as follows. During...

Accounting
1.2K views

C4-3 Recording Transactions (Including Adjusting Journal Entrie Computing Net Profit Margin and Current Ratio (Chapters...

Accounting
1.2K views

Assume overhead application rates of \$14 per machine hour for the Machining Department and 200%...

Accounting
1.2K views

Materials Variances Manzana Company produces apple juice sold in gallons. Recently, the company adopted...