Flounder 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.1. Flounder 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 $469. The standalone selling price of the tablet is $230 (the cost to Flounder Company is $157). Flounder Company sells the Internet access service independently for an upfront payment of $292. On January 2, 2020, Flounder Company signed 100 contracts, receiving a total of $46,900 in cash.2. Flounder 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 Internet connections) during the 3-year contract period. That product bundle sells for $574. Flounder Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $145. Flounder Company signed 220 contracts for Flounder Bundle B on July 1, 2020, receiving a total of $126,280 in cash. Prepare any journal entries to record the revenue arrangement for Flounder Bundle B on July 1, 2020, and December 31, 2020.(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "Noentry" for the account titles and enter O for the amounts. Round answers to O decimal places, eg. 5,125.)DateAccount Titles and ExplanationDebitCrediJul. 1, 2020CashUnearned Service Revenue - InternetUnearned Service Revenue - MaintenanceSales Revenue(To record sales)Cost of Goods SoldInventory(To record cost of goods sold)Dec. 31, 2020

Journal entries shows the recording of transaction during an accounting year.

Answered: Flounder Company sells tablet PCs…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Flounder 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.

1.		Flounder 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 $469. The standalone selling price of the tablet is $230 (the cost to Flounder Company is $157). Flounder Company sells the Internet access service independently for an upfront payment of $292. On January 2, 2020, Flounder Company signed 100 contracts, receiving a total of $46,900 in cash.
2.		Flounder 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 Internet connections) during the 3-year contract period. That product bundle sells for $574. Flounder Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $145. Flounder Company signed 220 contracts for Flounder Bundle B on July 1, 2020, receiving a total of $126,280 in cash.

Prepare any journal entries to record the revenue arrangement for Flounder Bundle B on July 1, 2020, and December 31, 2020.
(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 O for the amounts. Round answers to O decimal places, eg. 5,125.)
Date
Account Titles and Explanation
Debit
Credi
Jul. 1, 2020
Cash
Unearned Service Revenue - Internet
Unearned Service Revenue - Maintenance
Sales Revenue
(To record sales)
Cost of Goods Sold
Inventory
(To record cost of goods sold)
Dec. 31, 2020

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