Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P18.2 (LO 2, 3, 4) (Allocate Transaction Price, Modification of Contract) Refer to the Tablet Bundle A revenue arrangement in P18.1. In response to competitive
P18.2 (LO 2, 3, 4) (Allocate Transaction Price, Modification of Contract) Refer to the Tablet Bundle A revenue arrangement in P18.1. In response to competitive pressure for Internet access for Tablet Bundle A, after 2 years of the 3 -year contract, Tablet Tailors offers a modified contract and extension incentive. The extended contract services are similar to those provided in the first 2 years of the contract. Signing the extension and paying $90 (which equals the standalone selling of the revised Internet service package) extends access for 2 more years of Internet connection. Forty Tablet Bundle A customers sign up for this offer. Instructions a. Prepare the journal entries when the contract is signed on January 2,2022 , for the 40 extended contracts. Assume the modification does not result in a separate performance obligation. b. Prepare the journal entries on December 31,2022 , for the 40 extended contracts (the first year of the revised 3-year contract). P18.2 (LO 2, 3, 4) (Allocate Transaction Price, Modification of Contract) Refer to the Tablet Bundle A revenue arrangement in P18.1. In response to competitive pressure for Internet access for Tablet Bundle A, after 2 years of the 3 -year contract, Tablet Tailors offers a modified contract and extension incentive. The extended contract services are similar to those provided in the first 2 years of the contract. Signing the extension and paying $90 (which equals the standalone selling of the revised Internet service package) extends access for 2 more years of Internet connection. Forty Tablet Bundle A customers sign up for this offer. Instructions a. Prepare the journal entries when the contract is signed on January 2,2022 , for the 40 extended contracts. Assume the modification does not result in a separate performance obligation. b. Prepare the journal entries on December 31,2022 , for the 40 extended contracts (the first year of the revised 3-year contract)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started