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.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A. On January 1, 2020, Machinery Corp. enters into a contract with a
customer for the sale of a machine and relatedone-yearmaintenance services
for a total contract price of P2,000.000. Machinery Corp. regulariy sells these
items separately. If they were to be purchased 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 transfesthe machine, andcolects the total contract price, on
February 1, 2020. The maintenance services start on that date.
Required:
Analyze the five steps of model of revenue recognition.
Transcribed Image Text:A. On January 1, 2020, Machinery Corp. enters into a contract with a customer for the sale of a machine and relatedone-yearmaintenance services for a total contract price of P2,000.000. Machinery Corp. regulariy sells these items separately. If they were to be purchased 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 transfesthe machine, andcolects the total contract price, on February 1, 2020. The maintenance services start on that date. Required: Analyze the five steps of model of revenue recognition.
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