nent CALCULATOR L SCREEN PRINTER V SION BACK NEXT Exercise 129 The Appliance Sto
ID: 2337851 • Letter: N
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nent CALCULATOR L SCREEN PRINTER V SION BACK NEXT Exercise 129 The Appliance Store is an experienced home appliance dealer. Appliance Store also offers a number of services together with the home appliances that it sells. Assume that Appliance Store sells dishwashers ona standalone basis. Appliance Store also sells installation services and maintenance services for dishwashers. However, Appliance Store does not offer installation or maintenance services to customers who buy dishwashers from other vendors. Standalone selling prices for dishwashers, installation, and maintenance are as follows.. Dishwasher only Installation service Maintenance services $1,240 120 240 1,550 Dishwasher with installation and maintenance services In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $200. Additionally, the incremental amount charged by Appliance Store for installation approximates the amount charged by independent third parties. Dishwashers are sold subject to a general right of return. If a customer purchases a dishwasher with installation and/or maintenance services, in the event Appliance Store does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $1,240 Indicate the amount of revenue that should he allocated to the dishwasher the installation, and to the maintenance contract Dishwasher Installation Total Prepare the necessary journal entry for the Appliance Store. (Credit account titles are automatically indented when 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.)Explanation / Answer
Indicate the amount of revenue the should be allocated Dishwasher 1240 1240/1600*1550 = $ 1201 insatallation 120 120/1600*1550 = $ 117 Maintenance 240 240/1600*1550= $ 232 Total 1600 Journal entries for applance store Particulars Debit Credit Cash $ 1,550.00 Sales Revenue $ 1,201.00 Service revenue $ 117.00 Unearned service revenue $ 232.00
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