PB6-4 Recording Journal Entry after Allocating Transaction Price to Performance Obligations [LO 6-5] [The following...
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PB6-4 Recording Journal Entry after Allocating Transaction Price to Performance Obligations [LO 6-5]
[The following information applies to the questions displayed below.] Sky Communcations (SKY) usually sells a cell phone for $320 plus 12 months of cellular service for $480. SKY has a special, time-limited offer in which it gives the phone for free and sells the 12 months of cellular service for $420. Each phone costs SKY $120, which it accounts for in its perpetual inventory system. On July 1, SKY sells one of the special packages, delivers the phone, collects the $420 cash, and starts the cellular service.
QUESTION
For the special offer, how much of the $420 relates to the sale of the cell phone versus the sale of the cellular service?
EQUIPMENT _______
SERVICE _________
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