Sarasota Appliance Co. manufactures low-price, nofrills appliances that are in great demand for rental units. Pricing and cost information on Sarasota's main products are as follows. Standalone Item Selling Price (Cost) Refrigerator $500 ($260 ) Range 550 (270) Stackable washer/dryer unit 710 (410) Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,800. The bundle price includes delivery and installation. Sarasota also provides installation (not a separate performance obligation) Respond to the requirements related to the following independent revenue arrangements for Sarasota Appliance Co. Your answer is partially correct. Try again. On June 1, 2017, Sarasota sold 90 washer/dryer units without installation to Laplante Rentals for $63.900. Laplante is a newer customer and is unsure how this product will work in its older rental units. Sarasota offers a 60-day return privilege and estimates, based on prior experience with sales on this product, 4% of the units will be returned. Prepare the journal entries for the sale and related cost of goods sold on June 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Accounts Receivable 63000 2520 Returned Inventory (To record sales) Sales Revenue 6480 Cost of Goods Sold 34560 (To record cost of goods sold) YellowCard Property Managers operates upscale student apartment buildings. On May 1, 2017, Sarasota signs a contract with YellowCard for 310 appliance bundles to be delivered and installed in one of its new buildings. YellowCard pays 20% cash at contract signing and will pay the balance upon installation no later than August 1, 2017. Prepare journal entries for Sarasota on (1) May 1, 2017, and (2) August 1, 2017, when all appliances are installed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Date Account Titles and Explanation Debit Credit (1) May 1, 2017 Cash 114560 Unearned Sales Revenue 114560 (2) Aug 1, 2017 Unearned Sales Revenue 114560 Cash 459240 Sales Revenue 575800 (To record sales) Cost of Goods Sold 297600 ST Inventory (To record cost of goods sold) 297600 Refer to the arrangement in part (b). It would help Yellow Card secure lease agreements with students if the installation of the appliance bundles can be completed by July 1, 2017 Yellow Card offers a 10% bonus payment if Sarasota can complete installation by July 1, 2017. Sarasota estimates its chances of meeting the bonus deadline to be 90%, based on a number of prior contracts on similar scale. Repeat the requirement for part (b), given this bonus provision. Assume installation is completed by July 1, 2017 (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit May 1, 2017 Cash 114560 * Unearned Sales Revenue 114560 Jul. 1. 2017 Unearned Sales Revenue 114560 Cash 515520 Sales Revenue 630080 (To record sales) Cost of Goods Sold 297600 Inventory 71600 (To record cost of goods sold) Epic Rentals would like to take advantage of the bundle price for its 400-unit project; on February 1, 2017, Sarasota signs a contra with Epic for 400 bundles. Under the agreement, Sarasota will hold the appliance bundles in its warehouses until the new rental uni are ready for installation. Epic pays 10% cash at contract signing. On April 1, 2017, Sarasota completes manufacture of the appliances in the Epic bundle order and places them in the warehouse. Sarasota and Epic have documented the warehouse arrangement and identified the units designated for Epic. The units are ready to ship, and Sarasota may not sell these units to other customers. Prepare journal entries for Sarasota on (1) February 1, 2017, and (2) April 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Feb. 1, 2017 Cash 71600 X Unearned Sales Revenue 71600 Apr. 1, 2017 Unearned Sales Revenue 600 Accounts Receivable 644400 Sales Revenue 716000 (To record sales) Cost of Goods Sold 297600 43 Inventory 297600 Sarasota Appliance Co. manufactures low-price, nofrills appliances that are in great demand for rental units. Pricing and cost information on Sarasota's main products are as follows. Standalone Item Selling Price (Cost) Refrigerator $500 ($260 ) Range 550 (270) Stackable washer/dryer unit 710 (410) Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,800. The bundle price includes delivery and installation. Sarasota also provides installation (not a separate performance obligation) Respond to the requirements related to the following independent revenue arrangements for Sarasota Appliance Co. Your answer is partially correct. Try again. On June 1, 2017, Sarasota sold 90 washer/dryer units without installation to Laplante Rentals for $63.900. Laplante is a newer customer and is unsure how this product will work in its older rental units. Sarasota offers a 60-day return privilege and estimates, based on prior experience with sales on this product, 4% of the units will be returned. Prepare the journal entries for the sale and related cost of goods sold on June 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Accounts Receivable 63000 2520 Returned Inventory (To record sales) Sales Revenue 6480 Cost of Goods Sold 34560 (To record cost of goods sold) YellowCard Property Managers operates upscale student apartment buildings. On May 1, 2017, Sarasota signs a contract with YellowCard for 310 appliance bundles to be delivered and installed in one of its new buildings. YellowCard pays 20% cash at contract signing and will pay the balance upon installation no later than August 1, 2017. Prepare journal entries for Sarasota on (1) May 1, 2017, and (2) August 1, 2017, when all appliances are installed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Date Account Titles and Explanation Debit Credit (1) May 1, 2017 Cash 114560 Unearned Sales Revenue 114560 (2) Aug 1, 2017 Unearned Sales Revenue 114560 Cash 459240 Sales Revenue 575800 (To record sales) Cost of Goods Sold 297600 ST Inventory (To record cost of goods sold) 297600 Refer to the arrangement in part (b). It would help Yellow Card secure lease agreements with students if the installation of the appliance bundles can be completed by July 1, 2017 Yellow Card offers a 10% bonus payment if Sarasota can complete installation by July 1, 2017. Sarasota estimates its chances of meeting the bonus deadline to be 90%, based on a number of prior contracts on similar scale. Repeat the requirement for part (b), given this bonus provision. Assume installation is completed by July 1, 2017 (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit May 1, 2017 Cash 114560 * Unearned Sales Revenue 114560 Jul. 1. 2017 Unearned Sales Revenue 114560 Cash 515520 Sales Revenue 630080 (To record sales) Cost of Goods Sold 297600 Inventory 71600 (To record cost of goods sold) Epic Rentals would like to take advantage of the bundle price for its 400-unit project; on February 1, 2017, Sarasota signs a contra with Epic for 400 bundles. Under the agreement, Sarasota will hold the appliance bundles in its warehouses until the new rental uni are ready for installation. Epic pays 10% cash at contract signing. On April 1, 2017, Sarasota completes manufacture of the appliances in the Epic bundle order and places them in the warehouse. Sarasota and Epic have documented the warehouse arrangement and identified the units designated for Epic. The units are ready to ship, and Sarasota may not sell these units to other customers. Prepare journal entries for Sarasota on (1) February 1, 2017, and (2) April 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Feb. 1, 2017 Cash 71600 X Unearned Sales Revenue 71600 Apr. 1, 2017 Unearned Sales Revenue 600 Accounts Receivable 644400 Sales Revenue 716000 (To record sales) Cost of Goods Sold 297600 43 Inventory 297600