Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 6 up to 3 points WA Electric is an experienced natural gas generator dealer and also offers a number of services for the

image text in transcribed

Exercise 6 up to 3 points WA Electric is an experienced natural gas generator dealer and also offers a number of services for the natural gas generator it sells. WA Electric will sell natural gas generator s on a standalone basis, with installation, or with install and maintenance service. Appliance Center also sells installation services and maintenance services for ovens. However, natural gas generator does not offer installation or maintenance services to customers who buy natural gas generators from other vendors. Pricing for natural gas generators is as follows. Standalone With installation service With maintenance services With installation and maintenance services $ 9,500 10,250 11,500 12,000 In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $2,000. Additionally, the incremental amount charged by WA Electric for installationis similar to the amount charged by independent third parties. Ovens are sold subject to a general right of return. If a customer purchases an oven with installation and/or maintenance services, in the event Appliance Center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $9,500. Requirements Assume that a customer purchases a natural gas generator with both installation and maintenance services for $12,000. Based on its experience, WA Electric believes that it is probable that the installation of the equipment will be performed satisfactorily to the customer. Assume that the maintenance services are priced separately (i.e., the three components are distinct). Identify the separate performance obligations and amounts related to WA Electric's revenue arrangement. Natural gas generator Installation Maintenance Show your calculations in the work area to the right. Failure to show your work will result in no credit for this exercise.

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_2

Step: 3

blur-text-image_3

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

College Accounting A Contemporary Approach

Authors: David Haddock, John Price, Michael Farina

3rd edition

77639731, 978-0077639730

More Books

Students also viewed these Accounting questions