1. Joe Windows manufactures and sells custom storm windows for three-season porches. Joe 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. Joe enters into the following non-cancellable contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,400 and chooses Joe to do the installation. Joe charges the same price for the windows regardless of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $600. The customer pays Joe $2,000 (which equals the fair value of the windows, which have a cost of $1,100) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Joe completes installation on October 15, 2020, and the customer pays the balance due. Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Joe. Round percentage allocations to two decimal places and final amounts to the nearest dollar. Assume Joe follows IFRS.

Required: Fill in the following chart.

Analysis:

Step 1: Identify the contract with customers.
Step 2: Identify the separate performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the separate performance obligations.	Complete schedule 1 below
Step 5: Recognize revenue when each performance obligation is satisfied.

Schedule 1

Performance obligation	Stand-Alone (SA) Selling Price	% of Total SA Selling Price	Contract Price	Allocation of Contract Price
Window delivery
Installation