Question 7 of 8 2.67/3 View Policies Show Attempt History Current Attempt in Progress Billy Hardware takes pride as the "shop around the corner" that can compete with the big-box home improvement stores by providing good service from knowledgeable sales associates (many of whom are retired local handymen). Billy has developed the following two revenue arrangements to enhance its relationships with customers and increase its bottom line. 1. 2. Billy sells a specialty portable generator that is popular with many of the local customers for use at their cabins. The Billy generator is a standard manufacture generator that Billy modifies so the generator can be used for a variety of tasks, Billy sold 60 of these generators during 2020 at a total price of $ 120,000, with a warranty guarantee that the product was free of any defects. The cost of generators sold is $ 84,000. The assurance warranties extend for a 3-year period with an estimated cost of $ 3,500. In addition, Billy sold extended warranties related to 10 Billy generators for 2 years beyond the 3-year period for $ 300 each To bolster its already strong customer base, Billy implemented a customer loyalty program that rewards a customer with t loyalty point for every $10 of purchases on a select group of Billy products. Each point is redeemable for a $1 discount on any purchases of Billy merchandise in the following 2 years. During 2020, customers purchased select group products for 200,000 (all products are sold to provide a 40% gross profit) and earned 20,000 points redeemable for future purchases. The standalone selling price of the purchased products is $ 200,000. Based on prior experience with incentives programs like this. Billy expects 14.000 points to be redeemed related to these sales (Billy appropriately uses this experience to estimate the value of future consideration related to bonus points) Your answer is partially correct. Prepare the journal entries for Billy related to the sales of Billy generators with warranties. (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 for the amounts. Do not round intermediate calculations. Round final answers to decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit Cash 123,000 6500 Sales Revenue 116500 Unearned Warranty Revenue (To record sales) 84,000 Cost of Goods Sold 84,000 Inventory Your answer is partially correct. Prepare the journal entries for the bonus point sales for Billy in 2020. (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 for the amounts. Do not round intermediate calculations. Round final answers to decimal places, eg,5,125.) Account Titles and Explanation Debit Credit Cash 200,000 Sales Revenue 13.084 Unearned Sales Revenue 186,916 (To record sales) DI 1. 120.000 Cost of Goods Sold 120,000 Inventory (To record cost of goods sold) Question 7 of 8 2.67/3 View Policies Show Attempt History Current Attempt in Progress Billy Hardware takes pride as the "shop around the corner" that can compete with the big-box home improvement stores by providing good service from knowledgeable sales associates (many of whom are retired local handymen). Billy has developed the following two revenue arrangements to enhance its relationships with customers and increase its bottom line. 1. 2. Billy sells a specialty portable generator that is popular with many of the local customers for use at their cabins. The Billy generator is a standard manufacture generator that Billy modifies so the generator can be used for a variety of tasks, Billy sold 60 of these generators during 2020 at a total price of $ 120,000, with a warranty guarantee that the product was free of any defects. The cost of generators sold is $ 84,000. The assurance warranties extend for a 3-year period with an estimated cost of $ 3,500. In addition, Billy sold extended warranties related to 10 Billy generators for 2 years beyond the 3-year period for $ 300 each To bolster its already strong customer base, Billy implemented a customer loyalty program that rewards a customer with t loyalty point for every $10 of purchases on a select group of Billy products. Each point is redeemable for a $1 discount on any purchases of Billy merchandise in the following 2 years. During 2020, customers purchased select group products for 200,000 (all products are sold to provide a 40% gross profit) and earned 20,000 points redeemable for future purchases. The standalone selling price of the purchased products is $ 200,000. Based on prior experience with incentives programs like this. Billy expects 14.000 points to be redeemed related to these sales (Billy appropriately uses this experience to estimate the value of future consideration related to bonus points) Your answer is partially correct. Prepare the journal entries for Billy related to the sales of Billy generators with warranties. (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 for the amounts. Do not round intermediate calculations. Round final answers to decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit Cash 123,000 6500 Sales Revenue 116500 Unearned Warranty Revenue (To record sales) 84,000 Cost of Goods Sold 84,000 Inventory Your answer is partially correct. Prepare the journal entries for the bonus point sales for Billy in 2020. (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 for the amounts. Do not round intermediate calculations. Round final answers to decimal places, eg,5,125.) Account Titles and Explanation Debit Credit Cash 200,000 Sales Revenue 13.084 Unearned Sales Revenue 186,916 (To record sales) DI 1. 120.000 Cost of Goods Sold 120,000 Inventory (To record cost of goods sold)
