User Account

All Pages

Calculate the sale price that should be allocated

Assignment Help Financial Accounting
Reference no: EM132835520

Gigabit Inc., a software company sells new accounting software and user support bundled together. The fair value of the software is $1,500 and the fair value of the user support is $500. The user support is valid for a period of 12 months from the date of software purchase. To be able to compete with a competitor's offering, Gigabit decided to sell the bundle at a discount for $1,800.

  • During its first month of sales, 100 units of this software bundle were sold at the discounted price, and expenses were $50,000.

Required

Problem 1: Calculate the sale price that should be allocated to each component of the bundle using the adjusted market assessment approach.

Problem 2: Calculate the sale price that should be allocated to each component of the bundle using the residual approach.

Problem 3: Assuming that the relative fair value method is used and the income tax rate is 30%, calculate the net income applicable to Gigabit's first month of sales.

Reference no: EM132835520

Questions Cloud

What amount should help university report for the period : Help University assessed its students P 3,000,000 for tuition and fees. What amount should Help University report for period as revenues for tuition and fees?
Compare the role of grocery sales in amazon : Analyze Amazon.com and Walmart using the value chain and competitive forces models. Compare the role of grocery sales in Amazon and Walmart's business strategi
Record transactions using a financial transaction worksheet : Purchased Equipment for P10,000, giving P2,000 cash and promising to pay the balance in 60 days. Record the transactions using a financial transaction worksheet
Forecast the percentage of administrative expenses : Forecast the percentage of administrative expenses for 2008 by using regression line.
Calculate the sale price that should be allocated : Calculate the sale price that should be allocated to each component of the bundle using the adjusted market assessment approach.
Solve what would bilal position be after the split : Bilal owns 1,200 shares of Decent, If Decent Company splits its stock under the 3 for 1 formula, then calculate what would Bilal's position be after the split
Evaluate the history of cryptography from its origins : Evaluate the history of cryptography from its origins. Analyze how cryptography was used and describe how it grew within history. The writing assignment.
Write a paper that defines and describes what mentoring : Write a paper that defines and describes what mentoring is and why it is so important to health care organizations - Analyze the benefits and drawbacks
What will be challenges with a local organization : Will you look at going it alone in this new country and what will be your challenges or will you partner with a local organization and if so how will you avoid

Reviews

Write a Review

Financial Accounting Questions & Answers

  Which true regarding the decision for katherine special

Joseph Company is adopting a financial perspective, which of the following is true regarding the decision of whether or not to accept Katherine's special order?

  Garage as sole proprietorship

Alexandra operates a garage as a sole proprietorship. Alexandra also owns a half interest in a partnership that operates a gas station. This year Alexandra paid or reported the following expenses related to her garage and other property.

  Schedule of cost of goods manufactured income statement

Schedule of cost of goods manufactured, income statement.

  Operating cash flows under the indirect method

As the new controller for Overseas Inc., you have the responsibility of preparing the year-end financial statements for the company for year 20x2. Overseas has a fiscal year end of December 31. You have already completed the balance sheet and income ..

  What amount would be recorded in the december

MICA Company's, What amount would be recorded in the December 31, 202x adjusting entry to estimate uncollectible accounts receivable?

  Why someone might prefer to invest money in a gic instead

Why someone might prefer to invest their money in a GIC instead of mutual funds or a savings account? Why someone may be better off investing their money

  How much you invest now in order to achieve this goal

Suppose you will need $245,000 in 3 years to start up a new gym. How much do you have to invest now in order to achieve this goal

  Calculate depreciation for machine under diminishing-balance

Determine and Calculate depreciation for the machine under Diminishing-balance using double the straight-line rate for 2014 through to 2018.

  Explain the sarbanes-oxley act and impact on the auditing

Explain the Sarbanes-Oxley Act of 2002 and its impact on the auditing profession. Discuss how the Act has impacted public companies and auditors

  Prepare an income statement for allstar for the past month

Prepare an income statement for Allstar for the past month - Allstar Exposure designs and sells advertising services to small, relatively unknown companies.

  What is the net cash flow from investing activity

Assume there is no other transaction took place related to investing activities, what is the net cash flow from investing activity?

  Net accounts receivable after the adjustment for bad debts

The following information is from the records of Armadillo Camera Shop: Accounts receivable, December 31, 2015 $20,000 (debit) Allowance for Bad Debts, December 31, 2015 Prior to adjustment 600 (debit) Net credit sales for 2015 95,000 Accounts writte..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd