Naomi Appliance Store is an experienced home appliance dealer. Naomi also offers a

number of services together with the home appliances that it sells. Assume that Naomi

sells dishwashers on a standalone basis. Naomi also sells installation services and

maintenance services for dishwashers. However, Naomi does not offer installation or

maintenance services to customers who buy dishwashers from other vendors. Pricing for

dishwashers is as follows.

Dishwasher only $$1,400$

Dishwasher with Installation service $1,650$

Dishwasher with maintenance services $1,700$

Dishwasher with installation and maintenance services $1,850$

In each instance in which maintenance services are provided, the maintenance service is

separately priced within the arrangement at $$300.$ Additionally, the incremental amount

charged by Naomi for installation approximates the amount charged by independent third

parties. Dishwashers are sold subject to a general right of return. If a customer purchases

a dishwasher with installation and$/$or maintenance services, in the event Naomi does not

complete the service satisfactorily, the customer is only entitled to a refund of the portion

of the fee that exceeds $$1,400.$

Required:

a$.$ Assume that a customer purchases a dishwasher with both installation and

maintenance services for $$1,850.$ Based on its experience, Naomi 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. Identify the

separate performance obligations related to the Naomi revenue arrangement.

b$.$ Indicate the amount of revenue that should be allocated to the dishwasher, the

installation, and to the maintenance contract.

c$.$ Prepare the necessary journal entry for Naomi assuming that the delivery and the

installation happen at the same time.

solve in excel format