Creative Computing sells a tablet computer called the Protab. The $890 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 $270, a price that represents a 40% discount from the regular Probook price of $450. It is expected that 25% of the discount coupons will be utilized. A coupon to purchase a one-year extended warranty for $65. Customers can buy the extended warranty for $95 at other times if they do not use the $65 coupon. Creative estimates that 30% 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 $870. Required: 1. & 2. Indicate below whether each item is a separate performance obligation and allocate the transaction price of 96,000 Protab Packages to the separate performance obligations in the contract. 3. Prepare a journal entry to record sales of 96,000 Protab Packages. % Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Indicate below whether each item is a separate performance obligation and allocate the transaction price of 96,000 Protab Packages to the separate performance obligations in the contract. Item Descrption Performance Obligation? Yes Stand Alone Price $ 83,520,000 $ 0 Percentage of Total Stand Alone Price 100.00% Protab tablet Limited 6-month warranty Option to purchase a Probook Option to purchase extended warranty Total stand alone price No Yes Yes OOOO $ 83,520,000 100.00% x Item Descrption Percentage of Total Stand Alone Price 100.00% Total Transaction Price 85,440,000/= Allocated Contract Price $ $ 85,440,000 Protab tablet Limited 6-month warranty Option to purchase a Probook Option to purchase extended warranty Total contract price $ 85,440,000 Creative Computing sells a tablet computer called the Protab. The $890 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 $270, a price that represents a 40% discount from the regular Probook price of $450. It is expected that 25% of the discount coupons will be utilized. A coupon to purchase a one-year extended warranty for $65. Customers can buy the extended warranty for $95 at other times if they do not use the $65 coupon. Creative estimates that 30% 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 $870. Required: 1. & 2. Indicate below whether each item is a separate performance obligation and allocate the transaction price of 96,000 Protab Packages to the separate performance obligations in the contract. 3. Prepare a journal entry to record sales of 96,000 Protab Packages. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req3 Prepare a journal entry to record sales of 96,000 Protab Packages. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit 85,440,000 Cash Sales revenue Deferred revenue - coupons 85,440,000 $ 3,417,600 X
