UNEARNED REVENUE AND CUSTOMER DEPOSITS
On November 20, 2009, Green Bay Electronics agreed to manufacture and supply 500 electronic control units used by Wausau Heating Systems in large commercial and indus- trial installments. Wausau deposited $480 per unit upon signing the three-year purchase agreement, which set the selling price of each control unit at $1,500. Green Bay will record these units at $300 per unit in inventory. No units were delivered during 2009. In 2010, 100 units were delivered, 150 units were delivered during 2011, and the remaining units were delivered during 2012. Assume Green Bay uses a perpetual inventory system.
Required:
1. Prepare the entry by Green Bay to record receipt of the deposit during 2009. How would the deposit be reported in the financial statements at the end of 2009?
2. Prepare the entry by Green Bay to record the delivery of 100 units during 2010. How would the deposit be reported in the financial statements at the end of 2010?
3. Prepare the entry by Green Bay to record the delivery of 150 units during 2011. Wausau pays in cash upon delivery for units not covered by the deposit.