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Please help. Carla Vista Inc. manufactures and sells computers that include an assurance-type warranty for 90 days. Carla Vista offers an optional extended coverage plan
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Carla Vista Inc. manufactures and sells computers that include an assurance-type warranty for 90 days. Carla Vista offers an optional extended coverage plan under which it will repair or replace any defective part for three years from the expiration of the assurance-type warranty. Because the optional extended covernse plan is sold scparately. Carla Vota determines that the three years of the extended coverage represent a separate performance obligation. The total transaction price for the sale of a computer and the eatended warranty is $3,400 on October 1,2023 . Carla Vista determines that the stand-alone selling price of each is $3,010 and $390, respectively. Further, Carla Vista estimates, based on historical experience. that it will incur $240 in costs to repair defects that arise within the 90 -day coverage period for the assurance-type warranty. The cost of the equignent is 51,360 (b) Prepare the journal entry (or entries) to record the cash sale of the computes, cost of goods sold, and liabilities related to the warranties, (Credit account eibies ane autinaticaly indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tieles and enter a for the amount Uist all detit entrie before aredt Date Account ritles and Explanation Debit Credit October 1,2023 (To record the cash sale of the computer) October 1,2023 (To record cost of goods sold) Step by Step Solution
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