Indigo Windows manufactures and sells custom storm windows for three-season porches. Indigo also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Indigo enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,490 and chooses Indigo to do the installation. Indigo charges the same price for the windows irrespective of whether it does the installation or not. The Installation service is estimated to have a standalone selling price of $570. The customer pays Indigo $2,080 (which equals the standalone selling price of the windows, which have a cost of $1,110) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Indigo completes installation on October 15, 2020, and the customer pays the balance due. Prepare the journal entries for Indigo in 2020.

Indigo Windows manufactures and sells custom storm windows for three-season porches. Indigo also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Indigo enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,490 and chooses Indigo to do the installation. Indigo charges the same price for the windows irrespective of whether it does the installation or not. The Installation service is estimated to have a standalone selling price of $570. The customer pays Indigo $2,080 (which equals the standalone selling price of the windows, which have a cost of $1,110) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Indigo completes installation on October 15, 2020, and the customer pays the balance due. Prepare the journal entries for Indigo in 2020.

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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