Vaughn Windows manufactures and sells custom storm windows for three-season porches. Vaughn also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Vaughn enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,440 and chooses Vaughn to do the installation. Vaughn charges the same price for the windows irrespective of whether it does the installation or not. The customer pays Vaughn $2,040 (which equals the standalone selling price of the windows, which have a cost of $1,130) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Vaughn completes installation on October 15, 2020, and the customer pays the balance due. (a) Vaughn estimates the standalone selling price of the installation based on an estimated cost of $420 plus a margin of 30% on cost. Prepare the journal entries for Vaughn in 2020.

PART B ONLY

Given uncertainty of finding skilled labor, Vaughn is unable to develop a reliable estimate for the standalone selling price of the installation. Prepare the journal entries for Vaughn in 2020.

Given uncertainty of finding skilled labor, Vaughn is unable to develop a reliable estimate for the standalone selling price of the installation. Prepare the journal entries for Vaughn 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 O for the amounts.) Date Account Titles and Explanation Debit Credit 2020 Cash 2040 Accounts Receivable Unearned Service Revenue Sales Revenue (To record sales) Cost of Goods Sold 1130 1130 Inventory (To record cost of goods sold) 5, 2020 Cash Unearned Service Revenue Sales Revenue Accounts Receivable (To record payment received) Solution: Credit Date Account Titles and explanation 1-Jul-20 No Entry No Entry Debit $ Working $ $ 2,040 $ 400 1-Sep-20 Cash Accounts receivable Unearned service revenue Sales Revenue (To record delivery and installation expenses) $ $ ($2,440-$2040) 515 Working Below 1,925 Working Below $ 1,130 Cost of goods sold Inventory (To record cost of goods sold) $ 1,130 $ $ 400 515 15-Oct-20 Cash Unearned service revenue Service revenue Accounts receivable (To record Payment received) $ $ 515 400 Working: Windows Installation Service ($420 + 30%) Total Standalone Price Proportion % Amount in Bundle $2,040 78.89% 1925 Sales Revenue $546 21.11% 515 Unearned Service Revenue $2,586 2440