Sage Company sells total outdoor grilling solutions, providing gas and charcoal grills, accessories, and installation services for custom patio grilling stations. Respond to the requirements related to the following independent revenue arrangements for Sage products and services.
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Sage Company sells total outdoor grilling solutions, providing gas and charcoal grills, accessories, and installation services for custom patio grilling stations.
Respond to the requirements related to the following independent revenue arrangements for Sage products and services.
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- Bella Pool Company sells prefabricated pools that cost P100,000 to customers for P180,000. The sales price includes an installation fee, which is valued at P25,000. The fair value of the pool is P160,000. The installation is considered a separate performance obligation and is expected to take 3months to complete. The transaction price is allocated to the pool and the installation is:a. P155,676 and P24,324 respectivelyb. P160,000 and P25,000 respectively Show complete solutionMaster Grill Company sells outdoor grilling products, providing gas and charcoal grills, accessories, and installation services for custom patio grilling stations. Instructions Respond to the requirements related to the following independent revenue arrangements for Master Grill products and services. (a) Master Grill offers contract MG100 which is comprised of a free-standing gas grill for small patio use plus installation to a customer’s gas line for a total price $950. On a standalone basis, the grill sells for $800 (cost $470), and Master Grill estimates that the fair value of the installation service (based on cost-plus estimation) is $200. Master Grill signed 15 MG100 contracts on May 30, 2018, and customers paid the contract price in cash. The grills were delivered and installed on June 15, 2018. Prepare journal entries for Master Grill for MG100 in May and June 2018. (b) Master Grill sells its specialty combination gas/wood-fired grills to local restaurants. Each grill…Grill Master Company sells total outdoor grilling solutions, providing gas and charcoal grills, accessories, and installation services for custom patio grilling stations. Instructions Respond to the requirements related to the following independent revenue arrangements for Grill Master products and services. a. Grill Master offers contract GM205, which is comprised of a free-standing gas grill for small patio use plus installation to a customer's gas line for a total price $800. On a standalone basis, the grill sells for $700 (cost $425), and Grill Master estimates that the standalone selling price of the installation service (based on cost-plus estimation) is $150. (The selling of the grill and the installation services should be considered two performance obligations.) Grill Master signed 10 GM205 contracts on April 20, 2020, and customers paid the contract price in cash. The grills were delivered and installed on May 15, 2020. Prepare journal entries for Grill Master for GM205 in…
- Crane offers contract BM205, which consists of a free-standing gas barbecue for small patio use plus installation to a customer's gas line for a total price of $910. On a stand-alone basis, the barbecue sells for $800 (cost $450), and Crane estimates that the fair value of the installation service (based on cost-plus estimation) is $160. Crane signed 9 BM205 contracts on April 20, 2023, and customers paid the contract price in cash. The barbecues were delivered and installed on May 15, 2023. Prepare journal entries for Crane for BM205 in April and May 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation (To record sales) Debit |||| CredDogShow the solution in good accounting form
- Luke consulting enters into a contract with Holand University to restructure Holand's process for purchasing goods from suppliers. The contract states that Luke will earn a fixed fee of P25,000and earn an additional P10,000 if Holand achieves P10,000 of cost savings. Luke determines the transaction price as the expected value of expected consideration, what transsaction price will Luke estimate for this contract?BigBoy Equipment Inc. sells heavy-duty forklift trucks. Model 217A has a stand-alone price of $126,000. BigBoy offers to sell the 217A inclusive of a three-year service contract for $162,100. Required: Prepare a journal entry to record the sale of one Model 217A forklift truck plus service contract for $162,100 assuming: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. A comparable service contract is sold separately for $54,000. BigBoy uses the relative stand-alone value method for multiple deliverables. 2. The service contract has a variable stand-alone value ranging from $31,500 to $54.000 and BigBoy uses the residual value method. View transaction list Journal entry worksheet 2 Record the sale of Model 217A assuming comparable service contract is sold separately and using relative fair value method. Note: Enter debits before credits: Transaction General Journal Debit Credit >BigBoy Equipment Inc. sells heavy-duty forklift trucks. Model 217A has a stand-alone price of $154,000. BigBoy offers to sell the 217A inclusive of a three-year service contract for $198,200. Required: Prepare a journal entry to record the sale of one Model 217A forklift truck plus service contract for $198,200 assuming: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. A comparable service contract is sold separately for $66,000. BigBoy uses the relative stand-alone value method for multiple deliverables. 2. The service contract has a variable stand-alone value ranging from $38,400 to $66,000 and BigBoy uses the residual value method. Viow transaction list 1 Record the sale of Model 217A assuming comparable service contract Is sold separately and using relative falr value method. Is sold 2 Record the sale of Model 217A assuming the service contract has a varlable stand-alone value ranging from $30,000 to $70,000 and…
- Metlock Company sells outdoor grilling products, providing gas and charcoal grills, accessories, and installation services for custom patio grilling stations. Metlock offers contract MG100 which is comprised of a free-standing gas grill for small patio use plus installation to a customer’s gas line, and a 2-year warranty for parts for a total price $1,000 . On a standalone basis, the grill sells for $750 (cost $420), and Metlock estimates that the cost of the installation service is $100. The company usually gets a 30% profit added services (cost-plus method). Metlock signed 25 MG100 contracts on May 30, 2021, and customers paid the contract price in cash. The grills were delivered and installed on June 15, 2021. Prepare journal entries for Metlock for MG100 in May, June and December of 2021.Leo Consulting enters into a contract with Highgate University to restructure Highgate’s processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $66,000 and earn an additional $13,000 if Highgate achieves $130,000 of cost savings. Leo estimates a 70% chance that Highgate will achieve $130,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract? Transaction price for the contract ?Leo Consulting enters into a contract with Highgate University to restructure Highgate’s processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $25,000 and earn an additional $10,000 if Highgate achieves $100,000 of cost savings. Leo estimates a 50% chance that Highgate will achieve $100,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract?