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nikdorinn [45]
3 years ago
13

Sarjit Systems sold software to a customer for $80,000.

Business
1 answer:
Ipatiy [6.2K]3 years ago
8 0

Answer:

If the products are sold seperately they would sell for $100,000:

Software $70,000 = 70%

Technical Support $30,000 = 30%

Sarjit Systems sold the software for $80,000

Software 70% of 80,000 = $56,000

Technical Support 30% of 80,000 = $24,000

We will record technical support as deferred revenue since the customer pays for the support upfront before receiving the service.

The journal entry would be:

Account Title                          Debit           Credit

Cash                                       80,000

 Sales Revenue                                          56,000

  Deferred Revenue                                   24,000

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