It is December 31, 2020, and you are about to close the firm’s books for the year. Just as you think everything is done:
a)The firm’s Sales Manager comes to you with 75 completed customer service orders (valued at $63,000) that his sales technicians have just turned in to him. They had performed this work in December, but had forgotten to turn them in immediately after completing the work, as required.
b) The firm’s Purchasing Manager comes to you and informs you that he had just negotiated a “great” deal for the IT Department. Sun Systems has agreed to sell the firm a new server for $1 million. The original offer was for $1.25 million. The price reduction reflects Sun’s desire to capture the sale in 2020. The Purchasing Manager also tells you that no advance payment is required, and that the server will be delivered on March 1, 2022.
Explain how you will handle each of these transactions, including any required adjusting entries, based on established accounting principles.
