Following are excerpts from Amazon.com's revenue recognition policy: We recognize revenue from product sales when the following four criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured. We evaluate whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when we are primarily obligated in a transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, or have several but not all of these indicators, revenue is recorded at the gross sales price. We generally record the net amounts as commissions earned if we are not primarily obligated and do not have latitude in establishing prices. Such amounts earned are determined using a fixed percentage, a fixed-payment schedule, or a combination of the two. Product sales represent revenue from the sale of products and related shipping fees and digital content where we are the seller of record. Product sales and shipping revenues, net of promotional discounts, rebates, and return allowances, are recorded when the products are shipped and title passes to customers. Return allowances, which reduce revenue, are estimated using historical experience. Revenue from product sales and services rendered is recorded net of sales and consumption taxes. For each of the following independent transactions prepare the journal entry necessary to record the transaction in the space provided on page 8. A customer purchased a one-year Amazon Prime membership on 9/1 for $80. Benefits include free two-day shipping and unlimited streaming of thousands of movies and TV shows. Visa charged Amazon a 5% credit card fee on the sale. A customer purchased a first edition of Catcher in the Rye for $23,000 from ABE Books on the Amazon web site. Amazon will collect the proceeds and remit them to ABE net of a 2% credit card fee and the 5% commission Amazon earned on the sale. ABE will ship the book to the customer. A news story on National Public Radio (NPR) on 1/23/13 reported that Amazon is exploring technology that will allow it to anticipate customer purchases and ship items to holding centers near customers' homes before the customer even places an order. A customer purchased a MacBook Pro for $2, 500 using a gift card. The computer cost Amazon $2000. Amazon did not charge for the shipping which cost $25. Anticipating the customer will also purchase an Apple Thunderbolt Display for $950, Amazon shipped the 27-inch display to a holding center. The shipping cost Amazon $20