Creative Computing sells a tablet computer called the Protab.The $920 sales price of a Protab Package includes the following:One Protab computer. A 6-month limited warranty. This warrantyguarantees that Creative will cover any costs that arise due torepairs or replacements associated with defective products for upto six months. A coupon to purchase a Creative Probook e-bookreader for $400, a price that represents a 50% discount from theregular Probook price of $800. It is expected that 25% of thediscount coupons will be utilized. A coupon to purchase a one-yearextended warranty for $60. Customers can buy the extended warrantyfor $60 at other times as well. Creative estimates that 35% ofcustomers will purchase an extended warranty. Creative does notsell the Protab without the limited warranty, option to purchase aProbook, and the option to purchase an extended warranty, butestimates that if it did so, a Protab alone would sell for $900.All Protab sales are made in cash. Required: 1. & 2. Indicatedbelow whether each item is a separate performance obligation andallocate the transaction price of 90,000 Protab Packages to theseparate performance obligations in the contract. 3. Prepare ajournal entry to record sales of 90,000 Protab Packages (ignore anysales of extended warranties).
