Question

Exercise 18-29 In September 2020, Gaertner Corp. commits to selling 150 of its iPhone-compatible docking stations to Better Buy Co. for $15,000 ($100 per product). The stations are delivered to Better Buy over the next 6 months. After 90 stations are delivered, the contract is modified and Gaertner promises to deliver an additional 45 products for an additional $4,275 ($95 per station). All sales are cash on delivery. Prepare the journal entry for Gaertner for the sale of the first 90 stations. The cost of each station is $54. (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.) Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold)

Answer 1

Answer:

Journal Entries as follows:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (90 x $100)	9000
	Sales Returns		9000
	(To record the sale of the station)
	Cost of Goods sold (90 x $54)	4860
	Inventory		4860
	(To record the cost of goods sold)
b	Cash	1000
	Sales Revenue (10 x $100)		1000
	(To record the sale of additional stations)
	Cost of Goods Sale (10 x $54))	540
	Inventory		540
	(To record the cost of goods sold)
c	Cash	979
	Sales revenue		979
	(To record the sale of additional stations)
	Cost of Goods sold (10 x $54)	540
	Inventory		540
	(To record the cost of goods sold)

Working Notes:

Product balance (150-90) = 60
60 x $100 = $6000
$6000+$4275 = $10275
Total product = 60+45 = 105
Selling price per unit = $10275/105 = $97.86
Calculation of sale of 10 additional stations
$97.86=$97.9 x 10 =$979