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In September 2014, Gaertner Corp. commits to selling 154 of its iPhonecompatible docking stations to Better Buy Co. for $14,014 ($91 per product). The stations are delivered to Better Buy over the next 6 months. After 95 stations are delivered, the contract is modified and Gaertner promises to deliver an additional 41 products for an additional $3,526 ($86 per station). All sales are cash on delivery.
1. Prepare the journal entry for Gaertner for the sale of the first 95 stations. The cost of each station is $57.
2. Prepare the journal entry for the sale of 10 more stations after the contract modification, assuming that the price for the additional stations reflects the standalone selling price at the time of the contract modification. In addition, the additional stations are distinct from the original products as Gaertner regularly sells the products separately.
3. Prepare the journal entry for the sale of 10 more stations (as in (b)), assuming that the pricing for the additional products does not reflect the standalone selling price of the additional products and the prospective method is used.
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