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gupta industries received a $380,000 prepayment from packard associates for the sale of new equipment. gupta will bill packard an additional $108,000 upon delivery of the equipment. upon receipt of the $380,000 prepayment, how much should gupta recognize for a contract asset, a contract liability, and accounts receivable?

Sagot :

The amount of contract asset and the account receivable is zero

Received pre payment = $350,000

Additional billed amount = $105,000

An element's right to consideration in return for labor and products that the substance has moved to a client when that right is molded on some different option from the progression of time (for instance, the element's future presentation) is called Contract Asset.

So by considering the above information, the contract asset and the account receivable are zero while the contract liability is $350,000 because it is advanced from the customer so it would be treated as a current liability. Therefore, the amount of contract asset and the account receivable is zero

Know more about the Contract Assets and account receivable - https://brainly.com/question/15575973

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