Ask Question
9 January, 01:17

On July 31, O'Malley Company contracted to have two products built by Taylor Manufacturing for a total of $185,000. The contract specifies that payment will only occur after both products have been transferred to O'Malley Company. O'Malley determines that the standalone prices are $100,000 for Product 1 and $85,000 for Product 2. On August 1, when Product 1 has been transferred, what is the journal entry to record this event?

+3
Answers (1)
  1. 9 January, 04:54
    0
    Debit to contract assets for $100,000

    Explanation:

    Data given in the question

    Total manufacturing cost = $185,000

    Standalone price for product 1 = $100,000

    Standalone price for product 1 = $85,000

    By considering the above information, since the product 1 has been transferred which means we debited the contract assets for $100,000 as it increased the asset account
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On July 31, O'Malley Company contracted to have two products built by Taylor Manufacturing for a total of $185,000. The contract specifies ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers