Question
On January 1, 2020, Machinery Corp. enters into a contract with a customer for the sale of a machine and related one-year maintenance services for
On January 1, 2020, Machinery Corp. enters into a contract with a customer for the sale of a machine and related one-year maintenance services for a total contract price of P2,000,000. Machinery Corp. regularly sells these items separately. If they were to be purchased separately, their stand-alone selling prices are as follows: P1,800,000 for the machine; and P600,000 for the one-year maintenance services Machinery Corp transfers the machine, and collects the total contract price, on February 1, 2020. The maintenance services start on that date. Required: Analyze the five steps of model of revenue recognition.
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