Question

Sheridan 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. Sheridan 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 $506. The standalone selling price of the tablet is $234 (the cost to Sheridan Company is $167). Sheridan Company sells the Internet access service independently for an upfront payment of $324. On January 2, 2020, Sheridan Company signed 90 contracts, receiving a total of $45,540 in cash. 2. Sheridan 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 $612. Sheridan Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $155. Sheridan Company signed 190 contracts for Sheridan Bundle B on July 1, 2020, receiving a total of $116,280 in cash.

Prepare any journal entries to record the revenue arrangement for Sheridan Bundle B on July 1, 2020, and December 31, 2020. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit choose a transaction date Jul. 1, 2020Dec. 31, 2020 enter an account title to record sales enter a debit amount enter a credit amount enter an account title to record sales enter a debit amount enter a credit amount enter an account title to record sales enter a debit amount enter a credit amount enter an account title to record sales enter a debit amount enter a credit amount (To record sales) enter an account title to record cost of goods sold enter a debit amount enter a credit amount enter an account title to record cost of goods sold enter a debit amount enter a credit amount (To record cost of goods sold) choose a transaction date Jul. 1, 2020Dec. 31, 2020 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Repeat the requirements for part (a), assuming that Sheridan Company has no reliable data with which to estimate the standalone selling price for the Internet service. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,125.) Date Account Titles and Explanation Debit Credit choose a transaction date Jan. 2, 2020Jul. 1, 2020Dec. 31, 2020 enter an account title to record sales enter a debit amount enter a credit amount enter an account title to record sales enter a debit amount enter a credit amount enter an account title to record sales enter a debit amount enter a credit amount (To record sales) enter an account title to record cost of goods sold enter a debit amount enter a credit amount enter an account title to record cost of goods sold enter a debit amount enter a credit amount (To record cost of goods sold) choose a transaction date Jan. 2, 2020Jul. 1, 2020Dec. 31, 2020 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Answer 1

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