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On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 4,100 units of Comfort Office Keyboard to one of its clients, Bionics, Ic., at a fixed price of $69,700, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2021. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same tim period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $41,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.00 per unit. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry that Meta would record on May 1, 2021. 3. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1, 2021? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry that Meta would record on May 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 1 Cash 69,700 Deferred revenue Deferred revenue - coupons < Required 1 Required 3 >

On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 4,100 units of Comfort Office Keyboard to one of its clients, Bionics, Ic., at a fixed price of $69,700, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2021. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same tim period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $41,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.00 per unit. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry that Meta would record on May 1, 2021. 3. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1, 2021? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry that Meta would record on May 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 1 Cash 69,700 Deferred revenue Deferred revenue - coupons < Required 1 Required 3 >

FINANCIAL ACCOUNTING
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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On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 4,100 units of Comfort Office Keyboard to one of its clients, Bionics, Ic., at a fixed price of $69,700, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2021. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same tim period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $41,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.00 per unit. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry that Meta would record on May 1, 2021. 3. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1, 2021? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry that Meta would record on May 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 1 Cash 69,700 Deferred revenue Deferred revenue - coupons < Required 1 Required 3 >
Transcribed Image Text:On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 4,100 units of Comfort Office Keyboard to one of its clients, Bionics, Ic., at a fixed price of $69,700, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2021. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same tim period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $41,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.00 per unit. Required: 1. How many performance obligations are in this contract? 2. Prepare the journal entry that Meta would record on May 1, 2021. 3. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%. In this case, what journal entry would Meta record on May 1, 2021? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry that Meta would record on May 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 1 Cash 69,700 Deferred revenue Deferred revenue - coupons < Required 1 Required 3 >
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