AC 302 Week 1 Quiz 100% Correct

AC 302 Question 3.
Question :
A contract

Question 2.
Question :
New Age Computers manufactures and sells pagers and radio paging systems which include a 180 day warranty on product defects. It also sells an extended warranty which provides an additional two years of protection. On May 10, it sold a paging system for $3,850 and an extended warranty for another $1,200. The journal entry to record this transaction would include

 1.
Question :
A company must account for a contract modification as a new contract if

Question 5.
Question :
Arizona Communications contracted to set up a call center for the City of Phoenix. Under the terms of the contract, Arizona Communications will design and set-up a call center with the following costs:
Design of call center 
$10,000 
Computers, servers, telephone equipment 
$275,000 
Software 
$85,000 
Installation and testing of equipment 
$15,000 
Selling commission 
$25,000 
Annual service contract 
$50,000 

 
            In addition, Arizona Communications will maintain and service the equipment and software to ensure smooth operations of the call center for an annual fee of $90,000. Ownership of equipment installed remains with the City of Phoenix. The contract costs that should be capitalized is

Question 4.
Question :
On November 1, 2014, Green Valley Farm entered into a contract to buy a $75,000 harvester from John Deere. The contract required Green Valley Farm to pay $75,000 in advance on November 1, 2014. The harvester (cost of $55,000) was delivered on November 30, 2014. The journal entry to record the delivery of the equipment includes a