Question
Please, answer in detail with explanation Question- Corporation sells construction equipment to a customer for $50,000. The equipment comes with a standard 2-year warranty covering
Please, answer in detail with explanation
Question-
Corporation sells construction equipment to a customer for $50,000. The equipment comes with a standard 2-year warranty covering any repairs that are required during that time. It does not cover routine maintenance, and the warranty is voided if the customer does not perform the required routine maintenance as scheduled during the warranty period. Corporation estimates that it costs $1,200 on average to provide warranty repairs over the two-year period for customers who purchase this construction equipment.
Corporation offers an extended warranty that covers repairs for years 3 through 10. The price of the extended warranty is $3,000. Corporation estimates that it costs $2,500, on average, to provide the additional repairs required under the extended warranty.
Required: Assuming the customer chooses not to purchase the extended warranty, what journal entry(ies) should Corporation make at the time of the sale?
Assuming the customer chooses to purchase the extended warranty, what journal entry(ies) should Kruger make at the time of the sale?
Question. On November 1, 2019, ABC Corporation sold software and a six-month technical support contract to a customer for $80,000. ABC sells the same software without technical support for $60,000. It sells technical support for $30,000. ABC allocates the transaction price based on relative stand-alone values.
Required: What amount of revenue does ABC recognize in 2019 and in 2020?
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