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Exercise 7-4 Parolini Company 2008.

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E7-4 Consider the following transactions of Parolini Company for 2008.

1. Sold a 6-month insurance policy to Orosco Corporation for $9,000 on March 1.

2. Leased office space to Easley Supplies for a 1-year period beginning September 1.The rent of
$30,000 was paid in advance.

3. A sales order for merchandise costing $9,000 that had a sales price of $14,000 was received on
December 28 from Guiterrez Company. The goods were shipped FOB shipping point on
December 31 and Guiterrez received them on January 3, 2009.

4. Merchandise inventory on hand at year-end amounted to $160,000. Parolini expects to sell the
inventory in 2009 for $180,000.

For each item above, indicate the amount of revenue Parolini should recognize in calendar year
2008. Explain.

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