Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Creative Computing sells a tablet computer called the Protab. The $970 sales price of a Protab Package includes the following: One Protab computer. A 6-month

Creative Computing sells a tablet computer called the Protab. The $970 sales price of a Protab Package includes the following:

  • One Protab computer.
  • A 6-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 $250, a price that represents a 50% discount from the regular Probook price of $500. It is expected that 20% of the discount coupons will be utilized.
  • A coupon to purchase a one-year extended warranty for $50. Customers can buy the extended warranty for $50 at other times as well. Creative estimates that 35% 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 $950.

All Protab sales are made in cash.

Required:

1. & 2.Indicated below whether each item is a separate performance obligation and allocate the transaction price of 80,000 Protab Packages to the separate performance obligations in the contract.

3.Prepare a journal entry to record sales of 80,000 Protab Packages (ignore any sales of extended warranties).

image text in transcribedimage 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

Access For Computer Accounting

Authors: Donna Kay

19th Edition

1259741109, 9781259741104

More Books

Students also viewed these Accounting questions

Question

1. I try to create an image of the message

Answered: 1 week ago

Question

4. What is the goal of the others in the network?

Answered: 1 week ago