Master Grill offers contract MG100 which is comprised of a free-standing gas gri
ID: 2493325 • Letter: M
Question
Master Grill offers contract MG100 which is comprised of a free-standing gas grill for small patio use plus installation to a customer’s gas line for a total price $700. On a standalone basis, the grill sells for $600 (cost $350), and Master Grill estimates that the fair value of the installation service (based on cost-plus estimation) is $150. Master Grill signed 15 MG100 contracts on May 30, 2014, and customers paid the contract price in cash. The grills were delivered and installed on June 15, 2014. Prepare journal entries for Master Grill for MG100 in May and June 2014. (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.) Date Account Titles and Explanation Debit Credit May 30 (To record cash received for installation) May 30 (To record cash received for sale of equipment) June 15 (To record revenue for installation of equipment) June 15 (To record revenue for sale of equipment) June 15 (To record cost of goods sold) Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWER Expand question part (b1) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (b2) The parts of this question must be completed in order. This part will be available when you complete the part above.
Explanation / Answer
Ans;
Date
Account Titles and Explanation
Debit
Credit
May 30,
2014
No journal entry required
Date
Account Titles and Explanation
Debit
Credit
June 15,
2014
Cash (15 contracts × $700)
$ 10,500
Sales revenue
$ 10,500
(Recorded sale of products for cash)
Date
Account Titles and Explanation
Debit
Credit
Aug 1,
2014
Accounts receivable
$ 18,000
Sales revenue ($900 *20)
$ 18,000
(Recorded sale on account)
Date
Account Titles and Explanation
Debit
Credit
Aug 20,
2014
Cash
$ 17,640
Discounts and allowances
($18,000 *2%)
$ 360
Accounts receivable ($900 *20)
$ 18,000
(Recorded sale of products on discounts)
(2) September 29, 2014:
Date
Account Titles and Explanation
Debit
Credit
Sep 29,
2014
Accounts receivable
$ 18,000
Sales revenue ($900 *20)
$ 18,000
(Recorded sale on account)
Date
Account Titles and Explanation
Debit
Credit
May 30,
2014
No journal entry required