CALCULATOR STANDARD VIEW PRINTER VERSION Problem 18-1 PCs combined with Internet

Question

CALCULATOR STANDARD VIEW PRINTER VERSION Problem 18-1 PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-FI hot spot.It offers two bundles with the following terms A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Intermet connection service contract is $455. The standalone selling price of the tablet is $234 (the cost to Headland Company is $171). Headland Company sells the Internet access service independently for an upfront payment of $270. On January 2, 2017, Headland Company signed 90 contracts, receiving a total of $40,950 in cas 2. Headland Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the 1 connections during the 3 year contract pen d. That product bundle sells for $551. Headland Company provides the 3-year tablet service plan as·separate product with a standalone selling price of $140. Headland Company signed 180 contracts for cash. Headiand Bundle 8 on July 1, 2017, receiving a total of $99,180 in Your answer is correct. Prepare any journal entries to record the revenue arrangement for Headland Bundle A on January 2, 2017, and December 31 enter O for the amounts. Round answers to 0 decimal places, e.g. 5,125.) automatically indented when the amount is entered. Do not ind ent manually. If no entry is required, select "No entry" for the account titles and Date Account Titles and Explanation Debit Credit Jan. 2, 2017 Cash 40950 Sales Revenue 18990 Unearned Service Revenue Internet 1960 o record sales) Cost of Goods Sold 15390 15390 Inventonyv To record cost of goods sold) Unearned Service Revenue- Internet 7320 Dec. 31, 2017 7320 Service Revenue SHOW SOLUTION MacBook Pro

Explanation / Answer

Req 1. Total price 455 Price apportionment: Tablet (455/504 * 234) 211.25 Internet (455/504*270) 243.75 Journal entries: Date Accounts title and explanations Debit $ Credit $ 02.01.17 Cash account Dr. 40950      Sales revenue (90*211.25) 19012.5      Unearned service revenue-Internet (90*243.75) 21937.5 02.01.17 Cost of goods sold Dr. 15390     Inventory account (90*171) 15390 31.12.17 Unearned service revenue-Internet Dr. 7320     Service revenue-Internet 7320 Req 2. Total price 551 Price apportionment: Tablet (551/644*234) 200 Internet (551/644*270) 231 Service (551/644*140) 120 Journal entries: Date Accounts title and explanations Debit $ Credit $ 01.07.17 Cash account Dr. 99180     Sales revenue (180*200) 36000      Unearned service revenue-Internet (180*231) 41580      Unearned service revenue-maintenance (180*120) 21600 Cost of goods sold Dr. 30780    Inventory (180*171) 30780 31.12.17 Unearned service revenue-Internet Dr. (41580*1/6) 6930 Unearned service revenue-Maintenance Dr. (21600*1/6) 3600      Service revenue 10530 Req 3. Journal entries: Date Accounts title and explanations Debit $ Credit $ 02.01.17 Cash account Dr. (90*455) 40950      Sales revenue (90*234) 21060      Unearned service revenue-Internet 19890 02.01.17 Cost of goods sold Dr. 15390     Inventory account (90*171) 15390 31.12.17 Unearned service revenue-Internet Dr. 6630     Service revenue-Internet (19890/3) 6630

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