Exercise 6-8 (Algo) Performance obligations; customer option for additional goods or services [LO6-4, 6-5]On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 4,500 units of Comfort Office Keyboard to one of its clients, Bionics,Inc., at a fixed price of $76,500, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2021. As part of thecontract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a5% discount on all sales during the same time period, which will be available to all customers. Based on experience, Meta Computerestimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $45,000 ofpurchases. 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 thiscase, what journal entry would Meta record on May 1, 2021?Complete this question by entering your answers in the tabs below.Required 1Required 2 Required 3How many performance obligations are in this contract?Number of performance obligationsRequired 1Required 2 >

Introduction: - Journal entry is the first stage of accounting process. Journal entry used to record…

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?

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?

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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