Saxton Enterprises sells a supercomputer package to customers. The components of this package are as follows: Computer Printer Extended Warranty Coupon for Wireless Stereo Speakers Coupon for Anti-Virus Software Installation Package $1,600 $300 $250 $75 $50 $200 The antivirus software is available to all customers for $100. It is estimated that 70% of the customers purchasing the computer package will purchase the anti-virus software. The wireless speakers have a retail cost of $75. The entire package sells for $1,900. Saxton sells 30 packages. a. How many performance obligations exist in this contract? b. Determine the allocation of the purchase price between the performance obligations. c. Prepare the journal entry to record the sale.
Saxton Enterprises sells a supercomputer package to customers. The components of this package are as follows: Computer Printer Extended Warranty Coupon for Wireless Stereo Speakers Coupon for Anti-Virus Software Installation Package $1,600 $300 $250 $75 $50 $200 The antivirus software is available to all customers for $100. It is estimated that 70% of the customers purchasing the computer package will purchase the anti-virus software. The wireless speakers have a retail cost of $75. The entire package sells for $1,900. Saxton sells 30 packages. a. How many performance obligations exist in this contract? b. Determine the allocation of the purchase price between the performance obligations. c. Prepare the journal entry to record the sale.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Saxton Enterprises sells a supercomputer package to customers. The components of this package are as
follows:
Computer
Printer
Extended Warranty
Coupon for Wireless Stereo Speakers
Coupon for Anti-Virus Software
Installation Package
$1,600
$300
$250
$75
$50
$200
The antivirus software is available to all customers for $100. It is estimated that 70% of the customers
purchasing the computer package will purchase the anti-virus software. The wireless speakers have a
retail cost of $75. The entire package sells for $1,900. Saxton sells 30 packages.
a. How many performance obligations exist in this contract?
b. Determine the allocation of the purchase price between the performance obligations.
c. Prepare the journal entry to record the sale.
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