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Need help for part B please,,,Company manufactures products ranging from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $
Need help for part B please,,,Company manufactures products ranging from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $ to $ and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Sandhill has the following arrangement with Tamarisk Inc.
Tamarisk purchases equipment from Sandhill for a price of $ and contracts with Sandhill to install the equipment. Sandhill charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $
Tamarisk is obligated to pay Sandhill the $ upon the delivery of the equipment.
Sandhill delivers the equipment on June and completes the installation of the equipment on September The equipment has a useful life of years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately.
Assuming Sandhill does not have market data with which to determine the standalone selling price of the installation services. As a result, an expected cost plus margin approach is used. The cost of installation is $; Sandhill prices these services with a margin relative to cost
a
Your answer is correct.
How should the transaction price of $ be allocated among the performance obligations? Do not round intermediate calculations. Round final answers to decimal places, eg
Equipment
$
Installation $
eTextbook and Media
List of Accounts
Attempts: of used
Prepare the journal entries for Sandhill for this revenue arrangement on June assuming Sandhill receives payment when installation is completed. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No entry" for the account titles and enter for the amounts. List all debit entries before credit entries. Round final answers to decimal places, eg
Date
Account Titles and Explanation
Debit
Credit
To record sales
To record cost of goods sold
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