On December 31, 2011, Wheeler Furniture (A Retailer) Sells a Television

question 29

Essay

On December 31, 2011, Wheeler Furniture (a retailer) sells a television and a three-year warranty to a customer. Wheeler would normally sell the television and warranty separately for $2,000 and $400, respectively. The cost of the television to Wheeler is $1,500. As part of a year-end promotion, Wheeler sells the television and warranty together for a reduced price of $2,300. The customer pays in full at the point of sale on the contract-signing.date.
Required:
1. Prepare the journal entry required at the contract-signing date.
2. Prepare the entry required when the television is delivered to the customer.
Wheeler will allocate the transaction price to the two performance obligations on the basis of the standalone selling prices of $2,000 and $400 for the television and the warranty, respectively, as follows:

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Definitions:

Selfish

Concerned excessively or exclusively with oneself, often disregarding the well-being or interests of others.

Normal

Referring to something that conforms to a standard; typical, expected, or average.

Altruistic Feelings

Altruistic feelings are emotions that lead an individual to act in the interest of others, often at a cost or risk to oneself, driven by a selfless concern for the well-being of others.

Egoistic Feelings

Emotions centered around oneself, often reflecting concern with one's own interests rather than those of others.