On January 1, 2014, Gordon Co. enters into a contract to sell a customer a wirin

Question

On January 1, 2014, Gordon Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $3,240. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Gordon identifies two performance obligations and allocates $1,296 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $756; the shelves have a cost of $346. Prepare the journal entry on February 5, 2014, for Gordon when the wiring base is delivered to the customer. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount Is entered. Do not indent manually.)

Explanation / Answer

Date Account Titles Debit Credit $ $ February 5 2014 Account receivable 1,296 Sales revenue 1,296 To record the sale Cost of goods sold 756 Inventory 756 To record cost of goods sold February 25 2014 Cash 3,240 Accounts receivable 1,296 Sales revenue 1,944 To record the sale and collection Cost of goods sold 346 Inventory 346 To record cost of goods sold

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