Question: What would the journal entries be for these
1. During 2010, Fannon will sell 2950 in turbines on credit, of which 2000 is due in 2010, 600 is due in 2011 and 350 is due in 2012. Ending balances on the balance sheet for receivables due in 2011 will be 922 and for receivables due in 2012 will be 350. In addition, Fannon also signs contracts to provide wind farms in the future. During 2010, Fannon will sign contracts (but not yet collect cash) to build wind farms in 2011 for 1500 and in 2012 for 800.
2. Second are service contracts that extend over two years to operate the wind farm. You may assume that those contracts are all paid in advance and services are provided in accordance with the contract. In 2010 Fannon will be paid 530, of which 210 is for services to be rendered in 2010, 180 for services in 2011 and 140 for services in 2012. At year-end 2010, Fannon will have total remaining obligations (ending balances on the balance sheet) to provide services of 195 in 2011 and 140 in 2012.
3. Turbines constitute Fannon's inventory. During 2010, Fannon will purchase 2030 of turbine components and spend 450 on labor to construct turbines. You may assume that all purchases of turbine components are on credit (trade payable, 30 day terms) and all labor is paid in cash. The ending balance in the inventory account will be 720 and the ending balance in accounts payable will be 1700.