D E 3 of 6 9 10 11 B 1 Problem 12 [multiple POs, stand-alone price known-inverted] 2 On August 1, 2020, ABC contracted with XYZ to provide the following products for a total bundled price which represents a $20,000 discount off the combined price of the products when sold 4 separately. 5 Product 1 - stand-alone selling price is $ 7 Product 2 - stand-alone selling price is $ 8 The obligation to provide Product 1 is satisfied over time (over the months beginning August 1, 2020). The obligation to provide Product 2 is satisfied when control over the products passes to the customer (which occurred at the August 1, 2020 delivery date). 12 Both products include a one-year quality assurance warranty that obligates ABC to repair or replace any 13 product that proves to be defective during the one-year warranty period. 14 This was a cash sale with XYZ making cash payment on the August 1, 2020 delivery date. 15 16 The fiscal year of ABC ends December 31, 2020. 17 Following are the journal entries made at the time of sale and at year-end by ABC: 18 19 20 Cash 21 Sales revenue 20,000 Deferred revenue 22 30,000 (entry made at time of sale) 23 24 Deferred revenue 6,250 25 Sales revenue 6,250 26 (entry made at 12/31/2020 to recognize revenue for 8/1-12/31) 27 28 29 Required 30 1. Fill in the missing blanks above 31 32 50,000 11 12 Both products include a one-year quality assurance warranty that obligates ABC to repair or replace any 13 product that proves to be defective during the one-year warranty period. 14 This was a cash sale with XYZ making cash payment on the August 1, 2020 delivery date. 15 The fiscal year of ABC ends December 31, 2020. 16 17 Following are the journal entries made at the time of sale and at year-end by ABC: 18 19 20 Cash 50,000 21 Sales revenue 20,000 Deferred revenue 22 30,000 (entry made at time of sale) 23 24 Deferred revenue 6,250 25 Sales revenue 6,250 26 (entry made at 12/31/2020 to recognize revenue for 8/1-12/31) 27 28 29 Required 30 1. Fill in the missing blanks above 31 32 33 Enter your answer below in the green boxes. 34 35 Total bundled price: 36 Product 1 stand-alone selling price: 37 Product 2 stand-alone selling price 38 Number of months that Product 1 performance obligation is satisfied: 39 40 41 42 43 1 2 3