Creative Computing sells a tablet computer called the Protab. The $780 sales price of a Protab Package includes the following:

• One Protab computer.
• A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months.
• A coupon to purchase a Creative Probook e-book reader for $200, a price that represents a 50% discount from the regular Probook price of $400. It is expected that 20% of the discount coupons will be utilized.
• A coupon to purchase a one-year extended warranty for $50. Customers can buy the extended warranty for $75 at other times if they do not use the $50 coupon. Creative estimates that 40% of customers will purchase an extended warranty
• Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $760.

Required: 1. & 2. Indicate below whether each item is a separate performance obligation and allocate the transaction price of 100,000 Protab Packages to the separate performance obligations in the contract.

 3. Prepare a journal entry to record sales of 100,000 Protab Packages (ignore any sales of extended warranties).

Performance Item Descrption Obligation? Stand Alone Price Protab tablet Yes $ 76,000,000 Limited 6-month warranty No $ Option to purchase a Probook Yes Option to purchase extended Yes warranty Total stand alone price $ 76,000,000 Item Descrption Protab tablet Limited 6-month warranty Option to purchase a Probook Option to purchase extended warranty Total contract price Percentage of Total Stand Alone Price 100.00% x x Percentage of Total Stand Alone Total Transaction Price 78,000,000 $ 69 = Price 100.00% 0.00% 100.00% Allocated Contract Price 78,000,000 69 69 78,000,000