Prepare the journal entry for grouper for the sale

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Reference no: EM131975473

Problem

In September 2017, Grouper Corp. commits to selling 135 of its iPhone-compatible docking stations to Better Buy Co. for $14,040 ($104 per product). The stations are delivered to Better Buy over the next 6 months. After 93 stations are delivered, the contract is modified and Grouper promises to deliver an additional 43 products for an additional $4,257 ($99 per station). All sales are cash on delivery.

Prepare the journal entry for Grouper for the sale of the first 93 stations. The cost of each station is $59.

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 Grouper regularly sells the products separately.

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.

Reference no: EM131975473

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