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Question - Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2017. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2017, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2017, and Cass pays the final $25,000 on that date.
Required -
1. On what date does a contract exist between Cass and Dearborn?
2. What are Cass's performance obligations in the contract?
3. What is the transaction price?
4. Does this transaction price need to be allocated?
5. Prepare Cass's journal entries related to the contract with Dearborn.
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