On May 1, 2024, Meta Computer, Incorporated, enters into a contract to sell 5,500 units of Comfort Office Keyboard to one of its clients, Bionics, Incorporated, at a fixed price of $97,900, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2024. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher and that the coupon will be applied to $11,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.80 per unit. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry that Meta would record on May 1, 2024. 3. Assume the same facts and circumstances as above, except that Meta gives a 5 % discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1, 2024? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry that Meta would record on May 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < Prev 11 of 13 Next >
On May 1, 2024, Meta Computer, Incorporated, enters into a contract to sell 5,500 units of Comfort Office Keyboard to one of its clients, Bionics, Incorporated, at a fixed price of $97,900, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2024. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher and that the coupon will be applied to $11,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.80 per unit. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry that Meta would record on May 1, 2024. 3. Assume the same facts and circumstances as above, except that Meta gives a 5 % discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1, 2024? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry that Meta would record on May 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < Prev 11 of 13 Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On May 1, 2024, Meta Computer, Incorporated, enters into a contract to sell 5,500 units of Comfort Office Keyboard to one of its
clients, Bionics, Incorporated, at a fixed price of $97,900, to be settled by a cash payment on May 1. Delivery is scheduled for June 1.
2024. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller
will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on
experience, Meta Computer estimates a 50 % probability that Bionics will redeem the 25% discount voucher and that the coupon will
be applied to $11,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.80 per unit.
Required:
1. How many performance obligations are in this contract?
2. Prepare the journal entry that Meta would record on May 1, 2024.
3. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%. In
this case, what journal entry would Meta record on May 1, 2024?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Prepare the journal entry that Meta would record on May 1, 2024.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
< Prev 11 of 13
Next >
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