Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

TERET Oriole Company manufactures equipment. Oriole's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to

image text in transcribed
image text in transcribed
TERET Oriole Company manufactures equipment. Oriole's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 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. Oriole has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Orole for a price of $1,020,000 and contracts with Oncle to install the ginsent. Orole charges the same price for the equipment irrespective of whether it does the installation of not. Using market data, Oriole determines installation service is estimated to have a standalone riling price of $53,500. The cost of the equipment $643,000. Winkerbean is obligated to pay Orole the $1,020,000 upon the delivery and installation of the equ Onole delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. The equipment has a useful le of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be counted for separately Assuming Oriole does not have market data with which to determine the standalone selling price of the installation I n t an expected cost plus margin oproach w ed. The cost of installation is $36,700; Orole prices these services with a 20% margin relative to cost. (a) Your answer is incorrect. Try again. How should the transaction price of $1,020,000 belocated among the service obligations ont round internete calculation and finalmente 9166 Installation 50834 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 o for the amounts.) Date Account Titles and Explanation Debit Credit Jun. 1, 2017Sep. 30, 2017 (To record sales (To record cost of goods Jun 1, 2017Seo. 30, 2017 core service To record payment received)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Accounting Uk Gaap Volume 1

Authors: Frank Wood, Alan Sangster

1st Edition

0273718762, 9780273718765

More Books

Students also viewed these Accounting questions

Question

Who will receive the final evaluation?

Answered: 1 week ago