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please help. i will give a thumbs up immediately only if it is correct! numerous components. Unit selling prices range from $400,000 to $1,500.000 and
please help. i will give a thumbs up immediately only if it is correct!
numerous components. Unit selling prices range from $400,000 to $1,500.000 and are quotedinclusive of installation. Whe equipment in order for the installed equipment to perform to specifications. Blue has the following arrangement with Henderson inc - Henderson purchases equipment from Blue for a price of $1,040,000 and contracts with Blue to install the equipment. Blue charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $556,000 - Henderson is obligated to pay Blue the $1,040,000 upon the delivery and installation of the equipment. Blue delivers the equipment on June 1,2020, and completes the installation of the equipment on September 30, 2020. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately Assuming Blue does not have market data with which to determine the standalone selling price of the installationservices. As a result. an expected cost plus margin approach is used. The cost of installation is $33,800; Blue prices these services with a 25% margin relative to cost. How should the transaction price of $1,040,000 be allocated among the service obligations? (Do not rotnd intermediate calculations. Round final answers to 0 decimal places.) Equipment Installation Prepare the journal entries for Blue for this revenue arrangement in 2020 assuming Blue receives payment wint 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 Ofor the amounts) Step by Step Solution
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