Andrew Greene Recently Purchased on Layaway a Big Screen Television

question 11

Essay

Andrew Greene recently purchased on layaway a big screen television from Zack & Zany Home Furnishings.Zack & Zany is a public company.Gary paid $100 as a cash deposit on the television.The television cost Zack & Zany $1,500 and has a total retail price of $2,000.Zack & Zany has set the television aside pending the payment by Miller of the balance owed.
Zack & Zany does not require its customers to enter into an installment note or other fixed payment commitment or agreement when the initial deposit is received.Merchandise on layaway generally is not released to the customer until the customer pays the full purchase price.If the customer fails to pay the remaining purchase price,the customer forfeits his or her cash deposit.In the event the merchandise is lost,damaged,or destroyed,Zack & Zany either must refund the cash deposit to the customer or provide replacement merchandise.
When should Zack & Zany recognized the revenue from the sale to Greene?
Prepare the appropriate journal entries on Zack & Zany's books to record the receipt of the cash and the subsequent delivery of the television when the remaining balance is collected.

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Definitions:

Severe Injuries

Significant physical harm or damage to a person's body that requires extensive medical treatment.

Insurance Agent

A professional who sells insurance policies and advises clients on insurance matters.

Law Merchant

A body of commercial law that merchants developed over centuries, based on common practices and used to resolve disputes.

Magna Carta

A charter of liberties to which the English barons forced King John to give his assent in 1215; a document constituting a fundamental guarantee of rights and privileges.