Sandhill Windows manufactures and sells custom storm windows for porches. Sandhill 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. Sandhill enters into the following non-cancellable contract on July 1, 2023, with a local homeowner. The customer purchases windows for a price of $3,300 and chooses Sandhill to do the installation. Sandhill charges the same price for the windows regardless of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $805. The customer pays Sandhill $2,695 (which equals the fair value of the windows, which have a cost of $2,050) on delivery and the remaining balance on installation of the windows. The windows are delivered on September 1, 2023, Sandhill completes installation on October 15, 2023, and the customer pays the balance due. Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Sandhill. Assume Sandhill follows IFRS. (Round percentage allocations to 2 decimal places, 15.25% and final answers to O decimal places, eg. 5,275.) Performance Obligation Window delivery Installation Total When? How much?
Sandhill Windows manufactures and sells custom storm windows for porches. Sandhill 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. Sandhill enters into the following non-cancellable contract on July 1, 2023, with a local homeowner. The customer purchases windows for a price of $3,300 and chooses Sandhill to do the installation. Sandhill charges the same price for the windows regardless of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $805. The customer pays Sandhill $2,695 (which equals the fair value of the windows, which have a cost of $2,050) on delivery and the remaining balance on installation of the windows. The windows are delivered on September 1, 2023, Sandhill completes installation on October 15, 2023, and the customer pays the balance due. Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Sandhill. Assume Sandhill follows IFRS. (Round percentage allocations to 2 decimal places, 15.25% and final answers to O decimal places, eg. 5,275.) Performance Obligation Window delivery Installation Total When? How much?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Sandhill Windows manufactures and sells custom storm windows for porches. Sandhill 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.
Sandhill enters into the following non-cancellable contract on July 1, 2023, with a local homeowner. The customer purchases windows
for a price of $3,300 and chooses Sandhill to do the installation. Sandhill charges the same price for the windows regardless of whether
it does the installation or not. The price of the installation service is estimated to have a fair value of $805. The customer pays Sandhill
$2,695 (which equals the fair value of the windows, which have a cost of $2,050) on delivery and the remaining balance on installation
of the windows. The windows are delivered on September 1, 2023, Sandhill completes installation on October 15, 2023, and the
customer pays the balance due.
Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Sandhill. Assume
Sandhill follows IFRS. (Round percentage allocations to 2 decimal places, 15.25% and final answers to O decimal places, eg. 5,275.)
Performance Obligation
Window delivery
Installation
Total
When?
How much?
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