Part 4: On 06/19/202X, Integrative Solutions Consulting sold software to a customer for $250,000 with "free" tech support for six months. Integrative Solutions sells the same software without technical support for $240,000 and a stand-alone six-month tech support contract for $60,000. Thus, when sold separately, the software and technical support sells for $300,000. Prepare Integrative Solutions journal entry to record the sale on June 19" (show your calculation for allocating the transaction price).
Part 4: On 06/19/202X, Integrative Solutions Consulting sold software to a customer for $250,000 with "free" tech support for six months. Integrative Solutions sells the same software without technical support for $240,000 and a stand-alone six-month tech support contract for $60,000. Thus, when sold separately, the software and technical support sells for $300,000. Prepare Integrative Solutions journal entry to record the sale on June 19" (show your calculation for allocating the transaction price).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1: Introduction:
Revenue recognition is one of important accounting principle being used. As per this principle, all revenues earned should be recognised in the period these are earned. Same goes with expense side.
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