Sarasota Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hotspot. It offers two bundles with the following terms. 1. Sarasota 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 $523. The standalone selling price of the tablet is $248 (the cost to Sarasota Company is $178). Sarasota Company sells the Internet access service independently for an upfront payment of $323. On January 2, 2017, Sarasota Company signed 100 contracts, receiving a total of $52,300 in cash. 2. Sarasota Bundle Bincludes 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 $633. Sarasota Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $145. Sarasota Company signed 200 contracts for Sarasota Bundle Bon July 1, 2017 receiving a total of $126,600 in cash Prepare any journal entries to record the revenue arrangement for Sarasota 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 for the amounts. Round answers to decimal places 48.5,125) Debit Credit Date Jan 2.2017 Account Titles and Explanation Cash Unearned Service Revenue Internet Sales Revenue (To record sales) Cost of Goods Sold Inventory (To record cost of goods sold) Unearned Service Revenue Internet Dec 31, 2017: Service Revenue Prepare any journal entries to record the revenue arrangement for Sarasota 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 for the amounts. Round answers to decimal places, es 5,125) Debit Credit Date Dec 31, 2017 : Account Titles and Explanation Cash Unearned Service Revenue - Internet Unearned Service Revenue Maintenance Sales Revenue (To record sales) Cost of Goods Sold Inventory (To record cost of goods sold) Unearned Service Revenue - Internet Dec 31, 2017 Repeat the requirements for part (a), assuming that Sarasota 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 for the amounts. Round answers to decimal places, e... 5,125.) Date Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold)
