Problem 18-1 Vaughn Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Vaughn Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $506. The standalone selling price of the tablet is $234 (the cost to Vaughn Company is $167). Vaughn Company sells the Internet access service independently for an upfront payment of $324. On January 2, 2017, Vaughn Company signed 90 contracts, receiving a total of $45,540 in cash. Vaughn Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $612. Vaughn Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $155. Vaughn Company signed 190 contracts for Vaughn Bundle B on July 1, 2017, receiving a total of $116,280 in cash. 2. Your answer is correct. Prepare any journal entries to record the revenue arrangement for Vaughn Bundle A on January 2, 2017, and December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. Round answers to O decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit T Jan. 2, 2017 Cash 45540 Unearned Service Revenue - Internet 26460 Sales Revenue Sales Revenue 1 19080 (To record sales) 1 15030 ( Cost of Goods Sold Inventory T 15030 (To record cost of goods sold) | Dec. 31, 2017 | Unearned Service Revenue - Internet Service Revenue 8820 Your answer is partially correct. Try again. Prepare any journal entries to record the revenue arrangement for Vaughn Bundle B on July 1, 2017, and December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. Round answers to o decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit T Jul. 1, 2017 Cash 116280 T Unearned Service Revenue - Internet IT 52820 2 2 Unearned Service Revenue - Maintenance IT 25270 2 Sales Revenue 38190 (To record sales) Cost of Goods Sold J 31730 Inventory 31730 (To record cost of goods sold) Dec. 31, 2017 Unearned Service Revenue - Internet Unearned Service Revenue - Maintenance Service Revenue SHOW LIST OF ACCOUNTS Your answer is partially correct. Try again. Repeat the requirements for part (a), assuming that Vaughn Company has no reliable data with which to estimate the standalone selling price for the Internet service. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. Round answers to O decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit T Jan. 2, 2017 , (To record sales) (To record cost of goods sold) 7 Dec. 31, 2017 | Click if you would like to Show Work for this question: Open Show Work Problem 18-1 Vaughn Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Vaughn Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $506. The standalone selling price of the tablet is $234 (the cost to Vaughn Company is $167). Vaughn Company sells the Internet access service independently for an upfront payment of $324. On January 2, 2017, Vaughn Company signed 90 contracts, receiving a total of $45,540 in cash. Vaughn Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $612. Vaughn Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $155. Vaughn Company signed 190 contracts for Vaughn Bundle B on July 1, 2017, receiving a total of $116,280 in cash. 2. Your answer is correct. Prepare any journal entries to record the revenue arrangement for Vaughn Bundle A on January 2, 2017, and December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. Round answers to O decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit T Jan. 2, 2017 Cash 45540 Unearned Service Revenue - Internet 26460 Sales Revenue Sales Revenue 1 19080 (To record sales) 1 15030 ( Cost of Goods Sold Inventory T 15030 (To record cost of goods sold) | Dec. 31, 2017 | Unearned Service Revenue - Internet Service Revenue 8820 Your answer is partially correct. Try again. Prepare any journal entries to record the revenue arrangement for Vaughn Bundle B on July 1, 2017, and December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. Round answers to o decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit T Jul. 1, 2017 Cash 116280 T Unearned Service Revenue - Internet IT 52820 2 2 Unearned Service Revenue - Maintenance IT 25270 2 Sales Revenue 38190 (To record sales) Cost of Goods Sold J 31730 Inventory 31730 (To record cost of goods sold) Dec. 31, 2017 Unearned Service Revenue - Internet Unearned Service Revenue - Maintenance Service Revenue SHOW LIST OF ACCOUNTS Your answer is partially correct. Try again. Repeat the requirements for part (a), assuming that Vaughn Company has no reliable data with which to estimate the standalone selling price for the Internet service. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. Round answers to O decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit T Jan. 2, 2017 , (To record sales) (To record cost of goods sold) 7 Dec. 31, 2017 | Click if you would like to Show Work for this question: Open Show Work