Allocation of Transaction Price. Using the information in BE8-13, indicate how Sycamore should allocate the transaction price to the three products using the residual approach.
BE8-13 Allocation of Transaction Price. Sycamore enters into a contract with a customer to sell three products for a total transaction price of $15,000 Each product is appropriately classified as a separate performance obligation Sycamore only sells products A and B on an individual basis so it must estimate the standalone selling price for cement Information related to these three products is provided in the following table.
Product | Standalone Selling Price | Market Competitor Prices | |
Bucks | $6,200 | $7,800 | $5,500 |
Stones | $8,000 | $8,200 | $5,000 |
Cement | Not available | $4,000 | $2,000 |
How should Sycamore allocate the transaction price to the three products using the adjusted market assessment approach?
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Intermediate Accounting (2nd Edition)
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