Bespoke Inc. has manufactured a machine specifically to the design of its customer. The machine could...
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Bespoke Inc. has manufactured a machine specifically to the design of its customer. The machine could not be used by any other party. Bespoke Inc. has never manufactured this type of machine before and expects a number of faults to materialize in its operation during its first year of use, which Bespoke Inc. is contractually bound to rectify at no further cost to the customer. The nature of these faults could well be significant. As of Bespoke Inc.'s year-end, the machine had been delivered and installed, the cus- tomer invoiced for $100,000 (the contract price), and the costs incurred by Bespoke Inc. up to that date amounted to $65,000. Required How should Bespoke Inc. recognize this transaction? Bespoke Inc. has manufactured a machine specifically to the design of its customer. The machine could not be used by any other party. Bespoke Inc. has never manufactured this type of machine before and expects a number of faults to materialize in its operation during its first year of use, which Bespoke Inc. is contractually bound to rectify at no further cost to the customer. The nature of these faults could well be significant. As of Bespoke Inc.'s year-end, the machine had been delivered and installed, the cus- tomer invoiced for $100,000 (the contract price), and the costs incurred by Bespoke Inc. up to that date amounted to $65,000. Required How should Bespoke Inc. recognize this transaction?
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Related Book For
Accounting Information Systems
ISBN: 978-1133935940
10th edition
Authors: Ulric J. Gelinas, Richard B. Dull
Posted Date:
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