Question

Vivaldi computers manufactures customized computer for schools. On July 1, 2017, Vivaldi signed a contract to deliver a computer for $150,000, with the full payment to be received 30 days after delivery of the computer Under the contract, Vivaldi is also obligated to provide a one-year maintenance service. If sold separately, the computer and the maintenance service would have cost $140,000 and $20,000, respectively. On July 14 2017, Vivaldi delivers the computer and transfers over the title of the computer.

Required:

a. Identify each performance obligation's share (in dollars) of the contract revenue

b. Write the journal entries to record the sale. Please indicate the date of the journal entry.

c. Write the journal entries for August 142017 when payment is received.   

           

Answer 1