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hello and welcome to this session in which we would look at an exercise or a CPA exam simulation that deals with contract modification as of September 20x2 Roger Distributors Inc made the commitment to Staples to sell 150 iPhone compatible covers for a total of 1 500 at a rate of 10 per unit the covers were to be delivered to Staples over a six-month period however after delivering 90 covers the contract between the two company was modified and Roger agreed to deliver an additional 45 for 427.50 which will give you a selling price of 9.50 simply put what they did is now they decided to sell those additional ones four nine fifty additional 45. its important to note that all sales between the two companies were conducted on a cash on delivery basis and the cost for each cover for Roger is four dollars because were gonna be preparing journal entries using the Perpetual inventory system record the journal entry for the sale for the first 90 covers well we sold 90 covers it was ten dollar
