Revenue and expense recognition
Crandall SA uses the accrual basis of accounting and recognizes revenues at the time it sells goods or renders services. For each transaction, indicate the amount of revenue or expense that Crandall recognizes during April, and show the journal entry or entries that Crandall would make in April.
a. Collects €15,000 cash from customers during April for merchandise sold and delivered in March. The cost of the merchandise to the firm was €8,000.
b. Sells merchandise to customers during April for €24,500 cash. The merchandise cost the firm €6,500.
c. Sells to customers, on account, merchandise with a selling price of €105,000. The firm expects to collect the cash during May. The merchandise cost the firm €82,000 when it purchased the items from its supplier last month. The firm has not yet paid the supplier for the merchandise.
d. Pays suppliers €45,500 during April for merchandise received by the firm from its suppliers and sold to customers during March for €109,000.
e. Pays suppliers €50,000 during April for merchandise received from its suppliers and sold to customers during April. Crandall sold the merchandise for €90,400.
f. Receives from suppliers and sells to customers during April merchandise that cost €20,000. The selling price of the merchandise to the customer was €38,000, all on account. The firm expects to pay the supplier during May.
g. Receives from suppliers during April merchandise that cost €101,000 and that the firm expects to pay for during May. The firm also expects to sell the merchandise in May for €124,000.
h. Receives €26,500 from customers for merchandise that the firm will deliver in May.
The firm does not yet have the merchandise and expects to acquire it in May for €23,000.
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Posted 29 Apr 2017 10:04 AM
My Price 15.00
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