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

image text in transcribedimage text in transcribedimage text in transcribed

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 $560, a price that represents a 30% discount from the regular Probook price of $800. It is expected that 25% of the discount coupons will be utilized. A coupon to purchase a one-year extended warranty for $70. Customers can buy the extended warranty for $105 at other times if they do not use the $70 coupon. 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. Required: 1. & 2. Indicate below whether each item is a separate performance obligation and allocate the transaction price of 90,000 Protab Packages to the separate performance obligations in the contract. 3. Prepare a journal entry to record sales of 90,000 Protab Packages. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Indicate below whether each item is a separate performance obligation and allocate the transaction price of 90,000 Protab Packages to the separate performance obligations in the contract. Item Descrption Performance Obligation? Stand Alone Price Percentage of Total Stand Alone Price 0 0 Protab tablet Limited 6-month warranty Option to purchase a Probook Option to purchase extended warranty Total stand alone price 0 0 $ 0 0.00% Item Descrption Percentage of Total Stand Alone Price Total Transaction Price Allocated Contract Price Protab tablet Limited 6-month warranty Option to purchase a Probook Option to purchase extended warranty Total contract price $ 0 View transaction list Journal entry worksheet

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

Materiality In Financial Reporting An Integrative Perspective

Authors: Francesco Bellandi

1st Edition

178743737X, 9781787437371

More Books

Students also viewed these Accounting questions

Question

Recount the fundamental assumptions of the muted group theory

Answered: 1 week ago

Question

Compare and contrast monochronic and polychronic time orientations

Answered: 1 week ago

Question

Compare and contrast cultural preferences for privacy

Answered: 1 week ago