Creative Computing sells a tablet computer called the Protab. The $740 sales price of a Protab Package includes the following:One Protab computer.A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months.A coupon to purchase a Creative Probook e-book reader for $225, a price that represents a 40% discount from the regular Probook price of $375. It is expected that 20% of the discount coupons will be utilized.A coupon to purchase a one-year extended warranty for $70. Customers can buy the extended warranty for $100 at other times if they do not use the $70 coupon. Creative estimates that 40% of customers will purchase an extended warranty.Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $720. Req 1 and 2Prepare a journal entry to record sales of 100,000 Protab Packages.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.Req 3View transaction listJournal entry worksheet1Record the sales of 100,000 Protab Packages.Note: Enter debits before credits.Transaction1General JournalDebitCredit Required:1. & 2. Indicate below whether each item is a separate performance obligation and allocate the transaction price of 100,000 ProtabPackages to the separate performance obligations in the contract.3. Prepare a journal entry to record sales of 100,000 Protab Packages.Complete this question by entering your answers in the tabs below.Req 1 and 2Req 3Indicate below whether each item is a separate performance obligation and allocate the transaction price of 100,000 ProtabPackages to the separate performance obligations in the contract.Item DescriptionProtab tabletLimited 6-month warrantyOption to purchase a ProbookOption to purchase extended warrantyTotal stand-alone priceItem DescriptionProtab tabletLimited 6-month warrantyOption to purchase a ProbookOption to purchase extended warrantyTotal contract pricePerformanceObligation?Percentage ofTotal Stand-Alone PriceStand-Alone PriceX Total TransactionPrice0Percentage of TotalStand-Alone Price= Allocated ContractPrice00000.00%0

Allocating the transaction price is to be done based on the standalone selling price of the…

Answered: Creative Computing sells a tablet…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Creative Computing sells a tablet computer called the Protab. The $740 sales price of a Protab Package includes the following:

One Protab computer.
A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months.
A coupon to purchase a Creative Probook e-book reader for $225, a price that represents a 40% discount from the regular Probook price of $375. It is expected that 20% of the discount coupons will be utilized.
A coupon to purchase a one-year extended warranty for $70. Customers can buy the extended warranty for $100 at other times if they do not use the $70 coupon. Creative estimates that 40% of customers will purchase an extended warranty.
Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $720.

Req 1 and 2
Prepare a journal entry to record sales of 100,000 Protab Packages.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Req 3
View transaction list
Journal entry worksheet
1
Record the sales of 100,000 Protab Packages.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit

Required:
1. & 2. Indicate below whether each item is a separate performance obligation and allocate the transaction price of 100,000 Protab
Packages to the separate performance obligations in the contract.
3. Prepare a journal entry to record sales of 100,000 Protab Packages.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
Indicate below whether each item is a separate performance obligation and allocate the transaction price of 100,000 Protab
Packages to the separate performance obligations in the contract.
Item Description
Protab tablet
Limited 6-month warranty
Option to purchase a Probook
Option to purchase extended warranty
Total stand-alone price
Item Description
Protab tablet
Limited 6-month warranty
Option to purchase a Probook
Option to purchase extended warranty
Total contract price
Performance
Obligation?
Percentage of
Total Stand-
Alone Price
Stand-Alone Price
X Total Transaction
Price
0
Percentage of Total
Stand-Alone Price
= Allocated Contract
Price
0
0
0
0
0.00%
0

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