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Temka [501]
3 years ago
6

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

ne 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 $150, a price that represents a 50% discount from the regular Probook price of $300. 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 $70 at other times as well. 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. All Protab sales are made in cash. Required: 1. & 2. Indicated 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 (ignore any sales of extended warranties).
Business
1 answer:
Yuri [45]3 years ago
5 0

Answer:

Explanation:

1. Package of $740 sales price includes :

Protab Computer - 1

Limited warranty for 6 month

Coupon to purchase e-book for $150 (represents 50% discount) expected 20% utilized

Coupon to purchase 1-year warranty for $70 regular price $70 expected 40% purchase

Protab Computer price alone is $720.

2.  

Performance    Stand along          Percentage of the    Allocation of total

Obligation         selling price        sum of the stand     transactions price to

                   of the performance  alone selling price    each performance

                     obligation                of the performance   obligation.

                                                      obligation

Protab -   $72000000                      96%                          $71040000

tablet

Open to   $3000000                         4%                           $2960000

purchase

Probook

Option to

purchase      $0                                 0 .00%                               -

extended

warranty

Total;         $75,000,000              100.00%                       $74,000,000

Protab Selling Price = 100000 units × $720 = $72,000,000

Selling price of option to purchase probook = 100000 units × 20% utilisation * $150 = $3000000

Selling price of option to purchase extended warranty = ($70 -$70)×100000 units * 40% = $0

Total = $75,000,000

Percentage of Protab selling price of Total Selling Price = $72,000,000 /$75,000,000 = 96%

Percentage of Option to purchase Probook of Total Selling Price = $3,000,000 /$75,000,000 = 4%

Percentage of Option to purchase extended warranty of Total Selling Price = 0 .00%

Total Transaction Price = 100000 units × $740 = $74,000,000

Allocation of Total Transaction price to Protab = $74,000,000 * 96% = $71040000

Allocation of Total Transaction price to Option to purchase probook = $74,000,000 * 10% = $2960000

3.

Journal Entry

Account Title                         Debit                                Credit

Cash                                  $74,000,000  

Sales Revenue                                                          $71040000

Deffered Revenue - discount option                       $2960000

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Answer:

d. accretion

Explanation:

Accretion is the process by which new employees are added to a bargaining unit where they have common interest. It involves the gradual growth of business units. For example when unions transfer workers to a new employer.

Accretion occurs without election and is usually an operation of the law.

It helps preserve industrial stability by filling new jobs without going through an adversarial election process.

5 0
3 years ago
Each of two stocks, C and D, are expected to pay a dividend of $3 in the upcoming year. The expected growth rate of dividends is
Stels [109]

Answer:

Intrinsic value of Stock C is 300

Explanation:

given data

expected pay dividend = $3

growth rate of dividends = 9%

stock C require a rate of return = 10%

stock D require a rate of return = 13%

solution

we get here intrinsic value by the DDM method

intrinsic value = Upcoming Dividend ÷ ( Required rate of return - Growth rate of stock )  .................1

intrinsic value = \frac{3}{(0.10-0.09)}    

intrinsic value = \frac{3}{0.01}  

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8 0
3 years ago
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strojnjashka [21]
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lord [1]

Answer:

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3 years ago
Ian and Harriet divorced in 2017. Their son, Preston, is age 10 and has lived with Ian for the last two years. The divorce decre
Eddi Din [679]

Harriet is the person that can claim the earned income credit because the divorce decree gives Harriet the right to claim Preston as a dependent.

<h3>What the law on divorce states</h3>

The law on divorce or separation decree states that the noncustodial parent may claim the dependent even when there is no written declaration from the custodial parent.

Other explanation includes:

  • The parent who the child spends the most time with may claim the dependent.
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In conclusion, Harriet is the person that can claim the earned income credit because the divorce decree gives Harriet the right to claim Preston as a dependent.

Read more about income credit

<em>brainly.com/question/13522402</em>

3 0
2 years ago
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