A. On January 1, 2020, Machinery Corp. enters into a contraat with a oustomer for the sale of a machine and related one-yearmaintenance services for a total contract price of P2,000o.000. Machinery Corp. regularly sells these items separately. If they were to be purohased separately, their stand-alone selling prices are as follows: • P1,800,000 for the machine; and • P600,000 for the one-year maintenance services Machinery Corp transfes the machine, and colects the total contract prioe, on February 1, 2020. The maintenanoe services start on that date. Required: Analyze the five steps of model of revenue recognition.
A. On January 1, 2020, Machinery Corp. enters into a contraat with a oustomer for the sale of a machine and related one-yearmaintenance services for a total contract price of P2,000o.000. Machinery Corp. regularly sells these items separately. If they were to be purohased separately, their stand-alone selling prices are as follows: • P1,800,000 for the machine; and • P600,000 for the one-year maintenance services Machinery Corp transfes the machine, and colects the total contract prioe, on February 1, 2020. The maintenanoe services start on that date. Required: Analyze the five steps of model of revenue recognition.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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