Cellular Inc. is offering a promotion for new customers signing a contract: purchase a new phone,...

 
 

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Cellular Inc. is offering a promotion for new customers signing a contract: purchase a new phone, a two-year service agreement, a phone charger, and a set of headphones for $1,500 The transaction price as stated to the customer is $900 for the phone, $300 for the two-year service agreement, $100 for the phone charger, and $200 for the set of headphones. Allocate the $1,500 transaction price under the following case. The four items (phone, service, charger, and headphones) are sold separately by Cellular. The standalone selling prices of the phone, two-year service agreement, charger, and headphones are $1,100; $300; $100; and $300, respectively. • Note: Do not round until your final answer; round your final answers to the nearest whole dollar. Performance Obligations Phone Service Charger Headphones $ $ Transaction Price as Stated 1,500 × $ 0 x 0 x 0x 1,500 $ Standalone Selling Price 900 x $ 0x 0 x 0x 900 $ Allocated Transaction Price 300 x 0 x 0 x 0x 300 Cellular Inc. is offering a promotion for new customers signing a contract: purchase a new phone, a two-year service agreement, a phone charger, and a set of headphones for $1,500 The transaction price as stated to the customer is $900 for the phone, $300 for the two-year service agreement, $100 for the phone charger, and $200 for the set of headphones. Allocate the $1,500 transaction price under the following case. The four items (phone, service, charger, and headphones) are sold separately by Cellular. The standalone selling prices of the phone, two-year service agreement, charger, and headphones are $1,100; $300; $100; and $300, respectively. • Note: Do not round until your final answer; round your final answers to the nearest whole dollar. Performance Obligations Phone Service Charger Headphones $ $ Transaction Price as Stated 1,500 × $ 0 x 0 x 0x 1,500 $ Standalone Selling Price 900 x $ 0x 0 x 0x 900 $ Allocated Transaction Price 300 x 0 x 0 x 0x 300

Answer rating: 100% (QA)

To allocate the 1500 transaction price to the performance obligations we will use the relative stand... View the full answer