Question: Sarjit Systems sold software to a customer for $90,000. As part of the contract, Sarjit promises to provide free technical support over the following six

Sarjit Systems sold software to a customer for $90,000. As part of the contract, Sarjit promises to provide “free” technical support over the following six months. Sarjit sells the same software without technical support for $80,000 and a stand-alone six-month technical support contract for $20,000, so these products would sell for $100,000 if sold separately. Prepare Sarjit’s journal entry to record the sale of the software (ignore any potential entry to revenue or cost of sales).


Step by Step Solution

3.42 Rating (171 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Based on relative standalone selling prices the software comprises 80 of the total fair values 8000... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

270-B-A-F-A (1137).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!