iDevice Sellers sells iDevice (a smartphone) combined with Internet service, which permits the tablet to connect to the

Question

iDevice Sellers sells iDevice (a smartphone) combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot, and a service plan. It offers a single bundle with the following terms: iDevice bundle sells an iDevice with 2-years of Internet service and a service plan for the iDevice (for any repairs or upgrades to the tablet or the internet service) during the 2-year contract period. The product bundle sells for $700. The standalone selling price of the iDevice is $380 (the cost to iDevice Sellers $240). iDevice Sellers sells the Internet service independently for an upfront payment of $270. Additionally, the stand-alone price of the service plan is $160. On March 1, 2020, iDevice Sellers signed 100 contracts, receiving a total of $70,000 in cash. Prepare any journal entries to record the revenue arrangement for the iDevice bundle on March 1, 2020.

Help In Homework · Accepted Answer

Date Account title and Explanation Debit Credit March 1,2020 Cash [100 x $700] $70000 Sales revenue idevice [100 x $328] $32800 Unearned service revenue-Internet [100 x $234] $ 23400 Unearned service revenue-service plan [100x $138] $ 13800 [To record sales] Cost of goods sold [100x $240] $24000 Inventory $24000 [To record cost of goods sold] Dec 31,2020 Unearned service revenue-Internet [23400x 10/24] $9750 Unearned service revenue-Tablet [13800 x 10/24] $5750 Service revenue $15500 [To record revenue earned from Unearned revenue] Services contracted for 24 months (2 years). and Revenue should be recognized for 10 month march 2020 to dec2020 so multiply with 10 .Selling prices: Standalone Selling Price idevice [589 x 35.76%] $380 46.91% Internet service [589 x 42.30%] $ 270 33.34% service plan [589 x 21.95%] $160 19.75% Total $810 100% Actual Selling Price idevice [700x 46.91%] $ 328 Internet service [700 x 33.34%] $234 service plan [700 x 19.75%] 138 Total $ 700

Why Choose Us?

0% AI Guarantee

24/7 Support

Plagiarism Free

Expert Tutors

100% Confidential

On-Time Delivery

iDevice Sellers sells iDevice (a smartphone) combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot, and a service plan

Expert Solution

Archived Solution

Date	Account title and Explanation	Debit	Credit
March 1,2020	Cash [100 x $700]	$70000
	Sales revenue idevice [100 x $328]		$32800
	Unearned service revenue-Internet [100 x $234]		$ 23400
	Unearned service revenue-service plan [100x $138]		$ 13800
	[To record sales]

	Cost of goods sold [100x $240]	$24000
	Inventory		$24000
	[To record cost of goods sold]

Dec 31,2020	Unearned service revenue-Internet [23400x 10/24]	$9750
	Unearned service revenue-Tablet [13800 x 10/24]	$5750
	Service revenue		$15500
	[To record revenue earned from Unearned revenue]

Standalone Selling Price
idevice [589 x 35.76%]	$380	46.91%
Internet service [589 x 42.30%]	$ 270	33.34%
service plan [589 x 21.95%]	$160	19.75%
Total	$810	100%

Actual Selling Price
idevice [700x 46.91%]	$ 328
Internet service [700 x 33.34%]	$234
service plan [700 x 19.75%]	138
Total	$ 700