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Marushika Store is an experienced home appliance dealer. Marushika Store also offers a number of services along with the household appliances it sells. Assume that
Marushika Store is an experienced home appliance dealer. Marushika Store also offers a number of services along with the household appliances it sells. Assume that Marushika Store sells dishwashers separately (standalone basis). Marushika Store also sells dishwasher installation and maintenance services. However, Marushika Store does not offer installation or maintenance services to customers who purchase dishwashers from other vendors. Prices for dishwashers are as follows.
Dishwasher 1,140 Dishwasher with installation service 1,126 Dishwasher with maintenance service (maintenance) 1,380 Dishwasher with installation and maintenance services (maintenance) 1,450
In each instance where maintenance services are provided, maintenance services have a standalone price of 240. In addition, the additional amount charged by Marushika Store for installation is close to the amount charged by independent third parties. Dishwasher is sold with return rights. If the customer purchases a dishwasher with installation and/or maintenance services, if the Marushika Store does not complete the service satisfactorily, the customer is only entitled to a partial refund in excess of 1,140.
(a) Assume that a customer purchases a dishwasher with installation and maintenance services for 1,450. Based on his experience, Marushika Store believes that it is very likely that the installation of the equipment will be carried out satisfactorily to the customer. Assume that maintenance services are priced separately. Identify separate performance obligations related to Appliance Store revenue. (b) Determine the amount of revenue to be allocated to dishwashers, installation services, and to maintenance services. (c) Prepare the required journal entries for the Marushika Store.
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