Creative Computing sells a tablet computer called the Protab The $740 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 $400, a price that represents a 50 discount from the regular Probook price of $800 It is expected that 20 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 $65 at other times as well Creative estimates that 40 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 $720 Required 1 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 3 Prepare a journal entry to record sales of 100,000 Protab Packages (ignore any sales of extended warranties) (If no entry is required for a transaction event, select No journal entry required in the first account field )

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Posted on Aug 26, 2024

Creative Computing sells a tablet computer called the Protab. The $740 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 $740 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 $400, a price that represents a 50% discount from the regular Probook price of $800. It is expected that 20% 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 $65 at other times as well. Creative estimates that 40% 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 $720.

Required:

1. & 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.

3.	Prepare a journal entry to record sales of 100,000 Protab Packages (ignore any sales of extended warranties). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)