Prepare the journal entry to record the sale of smartphone

Assignment Help Accounting Basics

Reference no: EM131971762

Problem

Robert and Roman Cellular sells Smartphone and gives its customers coupon [some in the form of QR] codes to redeem Beets wireless headphones by email for each smartphone purchaser for $199 or higher per phone. each smartphone purchased is eligible for a single beats headphone [limit 2 headphones per household] in 2017 M & M Cellular sold 25,000 Smartphone for $129 each cost per unit is %98 and 50,000 smartphone for $220 each cost is $105. in preparation for the premium offer, M & M Cellular made a cash purchase of 40,000 beats headphone at $28 each in 2017 as the firm expects at least 70% of the coupons to be redeemed. the cost to mail each headphone to the customer is flat USPS rate of $2. coupon redeemed in 2017 total 28,000

Instruction

1-Prepare the journal entry to record the sale of smartphone in 2017 by R&R Cellular. Note that the firm uses perpetual inventory method.

2- prepare the journal entry to recognize the purchas of the headphones for the premium inventory [keep separate from regular inventory]

3-prepare the journal entry to recognize the redemption of coupons in 2017.

4-prepare the journal entry for the estimated liability related to perium at the end of 2017.

Show the balance at the following accounts at the end of 2017

a-inventory for the premium headphones.

b-premium expenses.

Reference no: EM131971762

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