1. Meyer & Smith is a full-service technology company. They provide equipment, installation services as well astraining. Customers can purchase any product or service separately or as a bundled package. ContainerCorporation purchased computer equipment, installation and training for a total cost of $144,000 on March15, 2018. Estimated standalone fair values of the equipment, installation, and training are $90,000, $60,000,and $30,000 respectively. The transaction price allocated to equipment, installation and training is$90,000, $60,000, $30,000 respectively$48,000, $48,000, $48,000 respectively$144,000 for the entire bundle$72,000, $48,000, $24,000 respectively

To allocate the transaction price to the equipment, installation, and training based on their…

Answered: 1. Meyer & Smith is a full-service…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Sunland Corporation purchased computer equipment, installation and training for a total cost of $ 135405 on March 15, 2021. Estimated standalone fair values of the equipment, installation and training are $ 88500, $ 44400 and $ 26400 respectively. The journal entry to record the transaction on March 15, 2021 will include a O credit to Sales Revenue for $ 135405. O credit to Unearned Service Revenue of $ 22440. O debit to Unearned Service Revenue of $ 26400. O credit to Service Revenue of $ 44400.
Sullivan Software sells packages of a software program and one year's worth of technical support for $500. Its packaging lists the $500 sales price as comprised of a software program and technical support. All of Sullivan's sales are for cash, and there are no returns. Sullivan sells the software program separately for $475 and offers a year of technical support separately for $75. The amount of revenue that GAAP, regarding software revenue recognition, would require Sullivan to attribute to the software program (as opposed to the technical support) is (rounded): $450. $475. O $432. $400.
am. 116.
Sheffield Corporation wishes to exchange a machine used in its operations. Sheffield has received the following offers from other companies in the industry. 2. 3. Tamarisk Company offered to exchange a similar machine plus $30,820. (The exchange has commercial substance for both parties) Vaughn Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) Bramble Company offered to exchange a similar machine, but wanted $4,020 in addition to Sheffield's machine. (The exchange has commercial substance for both parties.) In addition, Sheffield contacted Sunland Corporation, a dealer in machines. To obtain a new machine, Sheffield must pay $124,620 in addition to trading in its old machine. Machine cost Accumulated depreciation Fair valut Sheffield $214,400 80,400 123,280 Tamarisk Vaughn Bramble $160,800 $203,680 $214,400 60,300 95.140 100,500 92,460 123,280 127,300 Sunland $174.200 -0- 247,900 For each of the four independent situations,…
Pearl Inc. sells storage structures of various sizes to homeowners and businesses.Respond to the requirements related to the following independent revenue arrangements for Pearl products and services. Pearl offers building R400, mainly to homeowners. Pearl will also install the building for the customer. The price for Pearl to deliver and install an R400 is $ 5,500. On a standalone basis, the building sells for $ 5,300 (cost $ 3,400), and Pearl estimates that the standalone selling price of the installation service (based on cost-plus estimation) is $ 500. (The selling of the building and the installation services are considered two performance obligations.) Pearl signed 15 contracts to deliver and install R400s on April 5, 2017. Customers paid the contract price in cash. The buildings were delivered and installed during May 2017. Prepare journal entries for Pearl for R400 in April and May 2017. (Round intermediate calculations to 6 decimal places, e.g. 1.246871 and final answers to…

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