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George Windows manufactures and sells custom storm windows for porches. George also provides installation service for the windows. The installation process does not involve
George Windows manufactures and sells custom storm windows for porches. George also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. The installation and windows should be treated as separate performance obligations. George enters into the following contract on 7/1/20X4 with a local homeowner. The customer purchases windows and installation for a price of $2,400. The price of the installation service is estimated to have a fair value of $600. The windows are sold separately (without installation) for $2,000. The cost of manufacturing the windows is $1,110. The customer pays George $2,000 upon delivery and the remaining balance upon installation of the windows. The windows are delivered 8/1/20X4 and installation is complete on 10/15/20X4. Prepare George Window's required journal entries for 7/1/20X4, 8/1/20X4, and 10/15/20X4.
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