dolution
dolution.
For each of the following transactions of Yeats Machinery, indicate in which month or months the related revenue or expense should appear in the monthly income statement, and why.
(a). In January, the firm receives an order for a $200,000 machine, along with a 30% cash deposit. The machine is manufactured in March and April, and is delivered to the customer on April 16. The remainder of the price is collected in May.
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Order Paper Now(b). Components to be used in manufacturing the above machine are received in February and paid for in March.
(c). Workers are paid for the work on the machine in April and May. Quarterly payments for their health insurance are made in June. Workers also will receive pension benefits at some point because of the work they did during this period. (Hint: Health insurance and pension benefits are part of the cost of labor.)
(d). The company estimates there is a 5% chance that it will have to replace parts of the machine during the two-year warranty period.
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