Question

In: Accounting

Crazy Computer Store sells a back-to-school bundle that consists of a laptop computer, printer, and tablet...

Crazy Computer Store sells a back-to-school bundle that consists of a laptop computer, printer, and tablet to a customer for $2,400. Crazy Computer also sells the products on a stand-alone basis for the following amounts: the laptop for $1,800, the printer for $350, and the tablet for $500. The customer receives a $250 discount for buying the three products as a bundle. Crazy Computer normally sells the laptop and printer as a package for a price of $1,900. The tablet is normally not discounted.

Required:

1. How should the transaction price be allocated among the products?
2. Prepare the journal entry when Crazy sells a back-to-school bundle for cash.

How should the transaction price be allocated among the products?

Laptop $____
Printer $____
Tablet $____

Solutions

Expert Solution

The Transaction price will be allocated among the products on the basis of each of their transaction price.
Laptop and Printer are sold together at $ 1,900.
Laptop 1,800.00
Printer      350.00
2,150.00
Price to be allocated to Laptop 1900/2150*1800
1590.70
Price to be allocated to Printer 1900/2150*350
309.30
Bundle Price 2,400.00
Less: Price Allocated to Laptop 1,590.70
Price Allocated to Printer 309.30
Price to be Allocated to tablet      500.00
The transaction price be allocated among the products:
Laptop 1,590.70
Printer 309.30
Tablet      500.00
Journal entry Dr Cr
For Sales
Cash 2,400.00
Sale of Laptop 1,590.70
Sale of Printer      309.30
Sale of Tablet      500.00

ekkarill92 answered 10 months ago
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