Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 6-8 (Algo) Performance obligations; customer option for additional goods or services [LO6-4, 65] On May 1, 2024, Meta Computer, Incorporated, enters into a contract

image text in transcribed
image text in transcribed
image text in transcribed
Exercise 6-8 (Algo) Performance obligations; customer option for additional goods or services [LO6-4, 65] On May 1, 2024, Meta Computer, Incorporated, enters into a contract to sell 4,000 units of Comfort Office Keyboard to one of its clients, Bionics, Incorporated, at a fixed price of $68,000, to be settled by a cash payment on May 1 . Delivery is scheduled for June 1 . 2024. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be avaliable to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher and that the coupon will be applied to $40,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.00 per unit. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry that Meta would record on May 1, 2024. 3. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1, 2024? Complete this question by entering your answers in the tabs below. How many performance obligations are in this contract? Complete this question by entering your answers in the tabs below. Prepare the journal entry that Meta would record on May 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Complete this question by entering your answers in the tabs below. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1,2024 ? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Record the entry for Meta on May 1,2021 assuming that Meta gives a 5% discount option to Bionics instead of 25%. Note: Enter debits before credits

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

Operational Review Maximum Results At Efficient Costs

Authors: Rob Reider

3rd Edition

0471228109, 978-0471228103

More Books

Students also viewed these Accounting questions