1. 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:

1. Determine the dollars of revenue that should be allocated to the puppy and to the dog training services for each bundled sale.
2. Determine the total amount of revenue from the October 1 bundled sale that should be reported in the income statement ending October 31.
3. 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.)
4. Prepare the adjusting entry dated October 31 to record the fulfillment of the promised training services.