JOURNAL ENTRIES Flashcards
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On April 15, Year 3, Landon Co. signed a contract that entailed providing a piece of scientific equipment for $215,000 to Jacobs Inc., with delivery expected to occur on August 31, Year 3. Per the terms of the contract, Jacobs will pay Landon for the full amount on July 31, Year 3. Landon’s cost to produce the equipment is $175,000. Assuming delivery occurs as expected, the August 31 journal entry for Landon will involve which of the following debits/credits?
Debit to unearned sales revenue of $215,000.
April 15, Year 3: No entry.
July 31, Year 3:
Cash 215,000
Unearned sales revenue 215,000
August 31, Year 3:
Unearned sales revenue 215,000
Sales revenue 215,000
Cost of goods sold 175,000
Inventory 175,000*
Sale of an Asset During its useful Life
4.1 Disposals
DR Cash Received from Sale XXX
DR Accumulated Depreciation of sold asset: XXX
CR Sold Asset at cost XXX
Cr/DR The difference is gain/losses XXX
Write-off Fully depreciated Assets
4.2 Disposals
DR Accumulated depreciation (100 percent) XXX
CR Old asset at full cost (100 percent) XXX
Total & Permanent Impairment
4.2 Disposals
DR Accumulated Depreciation per records XXX
DR Loss due to impairment (the difference) XXX
CR Asset at full costXXX
