Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Creative Computing sells a tablet computer called the Protab. The $ 7 8 5 sales price of a Protab Package includes the following: One Protab

Creative Computing sells a tablet computer called the Protab. The $785 sales price of a Protab Package includes the following:
One Protab computer.
A six-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months.
A coupon to purchase a Creative Probook e-book reader for $425, a price that represents a 50% discount from the regular Probook price of $850. It is expected that 20% of the discount coupons will be utilized.
A coupon to purchase a one-year extended warranty for $55. Customers can buy the extended warranty for $55 at other times as well. Creative estimates that 45% of customers will purchase an extended warranty.
Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $765.
All Protab sales are made in cash.
Required:
& 2. Indicated below whether each item is a separate performance obligation and allocate the transaction price of 100,000 Protab Packages to the separate performance obligations in the contract.
Prepare a journal entry to record sales of 100,000 Protab Packages (ignore any sales of extended warranties).
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Value Added Auditing CERM Academy Series On Enterprise Risk Management

Authors: Greg Hutchins

4th Edition

978-0965466554

More Books

Students also viewed these Accounting questions

Question

Brief the importance of span of control and its concepts.

Answered: 1 week ago

Question

What is meant by decentralisation?

Answered: 1 week ago