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Can someone help me with this question, please? THE ANSWERS ARE GIVEN but I don't know how it got those answers? Show your work please
Can someone help me with this question, please? THE ANSWERS ARE GIVEN but I don't know how it got those answers? Show your work please and thanks in advance!
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In late 2017, MedEquip, Inc. signed a contract with a local hospital in which MedEquip agrees to (a) deliver and install specialized medical equipment and (b) provide four years of secure data storage for all patient readings captured by the equipment. On 1/1/2018, MedEquip completed the installation of the equipment. Also on 1/1/2018, MedEquip received $8,000 cash and a note receivable from the customer. The note receivable requires the customer to make three annual payments of $5,000, commencing on 12/31/2018. The note has a present value of $13,600 using a 5% discount rate. For clarity, the total cash receipts under the contract are $23,000 ($8,000 cash + 3 x $5,000 annual receipts on note receivable). The medical equipment (delivered and installed) and the data storage service should be treated as separate performance obligations. I. Assume the stand-alone prices for medical equipment and data storage are $15,000 and $10,000, respectively. How much revenue should be allocated to each performance obligation? Medical Equipment $12,960 Data storage $ 8,640 II. For the year ended 12/31/2018, determine how much should MedEquip recognize as Interest Revenue $680 Medical Equipment Revenue $12.960 Data Storage Revenue $2.115
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