Accounts Receivable Accounts Payable Advertising Expense Allowance for Sales Ret
ID: 2531481 • Letter: A
Question
Accounts ReceivableAccounts Payable
Advertising Expense
Allowance for Sales Returns and Allowances
Billings on Construction in Process
Cash
Cash, Parts, Labor
Commission Expense
Commission Revenue
Construction in Process
Construction Expenses
Contract Asset
Contract Liability
Cost of Goods Sold
Cost of Installment Sales
Deferred Gross Profit
Delivery Expense
Discount on Notes Receivable
Estimated Inventory Returns
Finished Goods Inventory
Franchise Revenue
Freight- Out
Gain on Repossession
Income Summary
Installment Accounts Receivable
Installment Sales Revenue
Interest Expense
Interest Revenue
Inventory
Inventory on Consignment
Liability to Bonus Point Customers
Liability to Enyart Company
Liability to Werner Metal Company
License Revenue
Loss from Long-Term Contracts
Loss on Repossession
Materials, Cash, Payables
No Entry
Notes Receivable
Operating Expenses
Payable to Consignor
Purchases
Realized Gross Profit
Repossessed Merchandise
Retained Earnings
Returned Inventory
Revenue from Consignment Sales
Revenue from Franchise Fees
Revenue from Long-Term Contracts
Sales Discounts
Sales Discounts Forfeited
Sales Returns and Allowances
Sales Revenue
Service Revenue
Unearned Franchise Revenue
Unearned Sales Revenue
Unearned Service Revenue - Internet
Unearned Service Revenue - Maintenance
Unearned Warranty Revenue
Warranty Expense
Warranty Liability Problem 18-1 Pronghorn Company sells tablet 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. Pronghorn Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $523. The standalone selling price of the tablet is $248 (the cost to Pronghorn Company is $178). Pronghorn Company sells the Internet access service independently for an upfront payment of $323. On January 2, 2017, Pronghorn Company signed 100 contracts, receiving a total of $52,300 in cash. Pronghorn Bundle B includes the tablet and Internet service plus a service plan forthe tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $633. Pronghorn Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $145. Pronghorn Company signed 200 contracts for Pronghorn Bundle B on July 1, 2017, receiving a total of $126,600 in cash. 1. 2. Prepare any journal entries to record the revenue arrangement for Pronghorn Bundle A on January 2, 2017, and December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to O decimal places, e.g. 5,125.) DateAccount Titles and Explanation To record sales)
Explanation / Answer
Standalone selling price % Amt to be allocated Allocated Tablet 248 43% $52,300 $22,489 Internet 323 57% $52,300 $29,811 Total 571 If % is not rounded off Standalone selling price % Amt to be allocated Allocated Tablet 248 43.43% $52,300 $22,715 Internet 323 56.57% $52,300 $29,585 Total 571 ans a Date 2-Jan Cash $52,300 Revenue Tablet $22,489 Unearned Revenue $29,811 if % not rounded off Cash $52,300 Revenue Tablet $22,715 Unearned Revenue $29,585 Cost of good sold $17,800 Inventory (178*100) $17,800 31-Dec Unearned Revenue $9,937 Revenue Internet $9,937 (29811/3) If answers not rounded off 29585/3 9862 ans b Standalone selling price % Amt to be allocated Allocated Tablet 248 35.00% $126,600 $44,310 Internet 323 45.00% $126,600 $56,970 Service 145 20.00% $126,600 $25,320 Total 716 If % is not rounded off Standalone selling price % Amt to be allocated Allocated Tablet 248 34.64% $126,600 $43,850 Internet 323 45.11% $126,600 $57,111 Service 145 20.25% $126,600 $25,638 Total 716 ans a Date 1-Jul Cash $126,600 Revenue Tablet $44,310 Unearned Revenue (56970+25320) $82,290 if % not rounded off Cash $126,600 Revenue Tablet $43,850 Unearned Revenue $82,750 Cost of good sold $35,600 Inventory (178*200) $35,600 31-Dec Unearned Revenue $13,715 Revenue Internet $13,715 82290/3*1/2 If answers not rounded off 82750/3*1/2 13792 ans c Date 2-Jan Cash $52,300 Revenue Tablet (248*100) $24,800 Unearned Revenue (bal fig) $27,500 Cost of good sold $17,800 Inventory (178*100) $17,800 31-Dec Unearned Revenue $9,167 Revenue Internet $9,167 (27500/3)