1. Gamebox sells video-gaming devices, games, and online game subscriptions. The Gamebox system normally sells for $250 and comes prepackaged with one game. The average price for games is $30. The company also sells its online game subscription package, which allows members to download and play one new game per month, for $240. During the holiday season, the company provides a package deal which includes the gaming system with two games and a free one-year game subscription for $400. The company should allocate $192.92 of the $400 package purchase price to the gaming system.

True or False?

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Noah Construction Company is building a large complex for a contract price of $5,000,000. This is a three-year project and the requirements for recognizing revenue over time are met. The total estimated cost of the project is $4,000,000 and the following information is available: Which one of the following entries would be made in Year 1 to record the costs incurred assuming revenue is recognized over time? Multiple Choice DR Inventory: Construction in progress $1,000,000 CR Accounts payable, cash, etc. $1,000,000 DR Inventory: Construction in progress $1,000,000 CR Income on long-term construction contract \$1,000,000 DR Inventory: Construction in progress $1,000,000 CR Billings $1,000,000 Elaine Company, a clothing store, sells clothing for a total selling price of $50,000 with a related cost of $35,000. Customers have a right of return within 30 days. Elaine Company estimates that 10% of the sales will be returned by customers. The journal entry to recognize the sales will include a credit to: Multiple Choice Unearned sales revenue. Refund liability. Sales returns and allowances. Inventory recovery