Prepare the journal entries in August

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Problem - Contract to Deliver Goods - On August 1, 2019, Aiken Corp. enters into a contract with Benton Corp. to sell it $25,000 of goods. Aiken will deliver the goods on August 30, 2019, and Benton will pay the full amount upon acceptance. The goods were manufactured by Aiken at a cost of $18,000. Both Aiken and Benton consider the acceptance of the goods on August 30 a formality given that Benton has purchased the same goods from Aiken numerous times without incident. On August 30, 2019, Aiken delivers the goods and Benton transfers cash to Aiken.

Required -

Does an enforceable contract exist between Aiken and Benton on August 1, 2019?

Prepare the journal entries in August 2019 necessary to account for this transaction. Assume Aiken uses a perpetual inventory system.

Assume that the contract is noncancelable. Would this condition allow Aiken to recognize revenue on August 1, 2019?

Reference no: EM132890116

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