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Wildhorse Company manufactures equipment. Wildhorse's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $ 2 5
Wildhorse Company manufactures equipment. Wildhorse's products range 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 to perform to specifications. Wildhorse has the
following arrangement with Indigo Inc.
Indigo purchases equipment from Wildhorse on May for a price of $ and contracts with Wildhorse to install
the equipment. Wildhorse charges the same price for the equipment irrespective of whether it does the installation or not.
The cost of the equipment is $
Indigo is obligated to pay Wildhorse the $ on delivery of the equipment and the balance on the completion of the
installation
Wildhorse delivers the equipment on June and completes the installation of the equipment on September Assume
that the equipment and the installation are two distinct performance obligations that should be accounted for separately. Wildhorse
does not have market data from 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 $; Wildhorse prices these services with a margin relative to
cost Allocate the transaction price of $ among the performance obligations of the contract. Assume Wildhorse follows IFRS.
Round percentage allocations to decimal places, eg and final answers to decimal places, eg
Delivery equipment $
Installation
$
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