Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A $4,500 OB. $4,050 OC. $3,600 OD. $3,638 Running Treadmills Inc. (RTI) is a treadmill manufacturer that sells the Extreme Climber for $4,500, which includes

image text in transcribed
A $4,500 OB. $4,050 OC. $3,600 OD. $3,638 Running Treadmills Inc. (RTI) is a treadmill manufacturer that sells the Extreme Climber for $4,500, which includes a 24-month warranty. While not widely advertised, RT's customers can purchase the treadmill without the warranty for $4,000. RTI also offers the warranty on a stand-alone basis to its customers and those who purchased the treadmill at non-RTI outlets on a stand-alone basis for $1,000. RTI follows IFRS and allocates revenues to the component parts using the relative fair value method. Ils policy is to recognize revenue from the sale of warranties on a straight-line basis over the life of the warranty. Assume that an Extreme Climber is sold on January 1, 20X8, for $4,500. RTI's year end is December 31. What is the total revenue reported by Running Treadmills in the month on January for this sale

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Payroll Accounting 2022

Authors: Bernard J. Bieg, Judith A. Toland

32nd Edition

0357518756, 9780357518755

More Books

Students also viewed these Accounting questions