Question

Wildhorse 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. Wildhorse 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 $464. The standalone selling price of the tablet is $229 (the cost to Wildhorse Company is $172). Wildhorse Company sells the Internet access service independently for an upfront payment of $290. On January 2, 2020, Wildhorse Company signed 100 contracts, receiving a total of $46,400 in cash. 2. Wildhorse 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 $563. Wildhorse Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $154. Wildhorse Company signed 190 contracts for Wildhorse Bundle B on July 1, 2020, receiving a total of $106,970 in cash.

Answer 1

Bundle 4! Credit standard alone price for Tablet .124 $204.72 stand alone price for Internet $290 29655.88 $ 259.28 - Total $519 Journal entries Dale _ particulars IF Debit Jani cash Ale (3464 x 100] or | $464,00 TO Revenue Tablet $ 204.72x100 |$20472 To unearned sevenue $25928 cost of goods sold ale or $17200 To Inventory $172 x100] $17200 Dec-31 unearned revence Ale or $8643 725928/3years] $8643 I Bundle-2 To Revenue - internet Allocation $229 standard price of Tablet standard price of Internet standard price of service $890 $154 -34.03% 191.59 oay | 242.60 22.88 188.81 5673 July Journal entries - particulars Cash Ale 08 To Revencie Tablet (191.59% 1907 To unearned revence cost of goods sold Ale TO Inuenbry ($172 x190] Debit credit $106,970 15,402 $143372 $32680 $32680 $ 29,895 | $23,895 446400 $22900 $23,500 ec-31 Uneamed Beveuca Alle or To Revenue [143372/3's Ale (464x100] To Revencie Tabel 29x1067 To unearned revenue Oy A 17200 $17200 cost of goods both the To Inventory (122x100] Decil Unearned Revenue Ale To Revence Inlernel (23500/3] or $7873 $7833