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Tops Dog Training & Kennel Company sells purebred German Shepard puppies to police departments and 4 months of professional dog training services for $1,000 and
- Tops Dog Training & Kennel Company sells purebred German Shepard puppies to police departments and 4 months of professional dog training services for $1,000 and $4,000, respectively. The company sells a puppy and training bundle on October 1 for a total price of $3,500. The training service begins immediately after the puppy is delivered to the customer on October 1.
Requirement:
- Determine the dollars of revenue that should be allocated to the puppy and to the dog training services for each bundled sale.
- Determine the total amount of revenue from the October 1 bundled sale that should be reported in the income statement ending October 31.
- Prepare the journal entry dated October 1 to record the receipt of cash for the puppy and training bundle. (Ignore the cost of goods sold portion of the entry.)
- Prepare the adjusting entry dated October 31 to record the fulfillment of the promised training services.
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