Problem 18-5 Ivanhoe Ranch & Shamrock is a distributor of ranch and farm equipme
ID: 2343370 • Letter: P
Question
Problem 18-5 Ivanhoe Ranch & Shamrock is a distributor of ranch and farm equipment. Its products range from small tools, power equipment for trench-digging and fencing, grain dryers, and barn winches. Most products are sold direct via its company catalog and Internet site. However, given some of its specialty products, select farm implement stores carry Ivanhoe's products. Pricing and cost information on three of Ivanhoe's most popular products are as follows. Standalone Selling Price (Cost) Item Mini-trencher Power fence hole auger Grain/hay dryer $3,600 ($2,000) (900) 13,800 (11,300) 1,300 Respond to the requirements related to the following independent revenue arrangements for Ivanhoe Ranch & Shamrock.Explanation / Answer
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Working:
Date Account Debit Credit Jun 20 Accounts Receivable $ 35,760 44700*80% Cash $ 8,940 44700*20% Unearned Service Revenue-Maintenance $ 1,176 See Working Unearned Service Revenue-Installation $ 2,941 See Working Unearned Sales Revenue $ 40,583 See Working Oct 1 Cash $ 35,760 Accounts Receivable $ 35,760 (to record full payment received) Unearned Sales Revenue $ 40,583 Unearned Service Revenue-Installation $ 2,941 Sales Revenue $ 40,583 Service Revenue $ 2,941 (to record sale) Cost of Goods Sold $ 33,900 11300*3 Inventory $ 33,900 Dec 31 Unearned Service Revenue-Maintenance $ 98 (1176/36)*3 Service Revenue $ 98