Video Planet ("VP") sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer's home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,500, sells the remote separately for $200, and offers the installation service separately for $300. The entire package sells for $1,900. Required: How much revenue would be allocated to the TV, the remote, and the installation service? Item Description TV Remote Installation Total revenue Allocated Revenue
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- rtainment Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP Winterface with other parts of the customer's home staff The installation includes programming the remote to have t system VP concludes that the TV, remote, and installation service are separate performance obligations VP sells the 60-inch TV the package for $2.300 VP does not sell the separately for $1.950 and sells the remote separately for $200, the installation service VP also estimates that installation service separately Vis aware that other similar provide the installation service. VP typically charges 30% ncurs approximately $200 of compensation and other costs t above cost on similar sales Required: 1 to 3. Calculate the stand-alone selling price of the installation service using each of the following approaches Adued market assessment Expected cost plus margin Residual 1,900Sonya, Inc. (SONI) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and onsite installation by SONI staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. SONI concludes that the TV, remote, and installation service are separate performance obligations. SONI sells the 60-inch TV separately for P17,500, sells the remote separately for P1,000 and offers the entire package P19,000.SONI does not sell the installation service separately. SONI is aware that other similar vendors charge P1,500 for the installation service. SONI also estimated that it incurs approximately P1,000 of compensation and other costs for SONI staff to provide the installation service. SONI typically charges 40% above cost on similar sales. Estimate the stand-alone selling price of the installation service using the estimated cost plus a margin approach a. 1,400 b. 500 Estimate the…Windsor Windows manufactures and sells custom storm windows for enclosed porches. Windsor also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. Windsor enters into the following contract on June 1, 2018, with a local homeowner. The customer purchases windows for a price of £4,700 and chooses Windsor to do the installation. Windsor charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of £1,200. The customer pays Windsor £4,000 (which equals the fair value of the windows, which have a cost of £2,300) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2018, Windsor completes installation on September 15, 2018, and the customer pays the balance due. Prepare the journal entries for Windsor in 2018. (Round…
- Windsor Windows manufactures and sells custom storm windows for enclosed porches. Windsor also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. Windsor enters into the following contract on June 1, 2018, with a local homeowner. The customer purchases windows for a price of £5,700 and chooses Windsor to do the installation. Windsor charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of £2,200. The customer pays Windsor £6,000 (which equals the fair value of the windows, which have a cost of £3,500) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2018, Windsor completes installation on September 15, 2018, and the customer pays the balance due. Prepare the journal entries for Windsor in 2018Green Doors manufactures and sells custom folding doors for enclosed porches. Green also providesinstallation service for the doors. The installation process does not involve changes in the doors, so thisservice can be provided by other vendors.Green enters into the following contract on May 1, 2023, with a local homeowner. The customer purchases adoor for a price of $7,500 and chooses Green to do the installation. The price of the installation service is$1,000. The customer agrees to pay Green $5,000 upon delivery of the door and the remaining balance uponinstallation of the doors. The door is delivered on July 1, 2023. Green completes installation on August 15,2023, and the customer pays the balance due.d) Prepare the journal entries for July 1 and August 15ABC manufactures and sells custom windows for enclosed porches. ABC also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. ABC enters into the following contract on June 1, 2022, with a local homeowner. The customer purchases windows for a price of P6,650 and chooses ABC to do installation. ABC charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of P1,710. The customer pays ABC P5,700 (which equals the fair value of the windows, which have a cost of P3,230) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2022, ABC completes installation on September 15, 2022 and the customer pays the balance due. Compute for the revenue to be recognize on September 15, 2022.
- Waterway Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Waterway Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $505. The standalone selling price of the tablet is $263 (the cost to Waterway Company is $160). Waterway Company sells the Internet access service independently for an upfront payment of $296. On January 2, 2020, Waterway Company signed 100 contracts, receiving a total of $50,500 in cash. 2. Waterway Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $607. Waterway Company provides the 3-year tablet service plan as a separate product with a standalone selling…Wilson Links Products sells a product that involves two separate performance obligations: the SwingRight golf club weight and the SwingCoach teaching software. SwingRight has a stand-alone selling price of $185. Wilson sells both the SwingRight and the SwingCoach as a package deal for $270. The SwingCoach software is not sold separately. Wilson is aware that other vendors charge $170 for similar software, and Wilson’s prices are generally 10% lower than what is charged by those vendors. Wilson estimates that it incurs approximately $100 of cost per copy of the software, and usually charges 50% above cost on similar products.Estimate the stand-alone selling price of the software using the adjusted market assessment approach.Waterway Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Waterway Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $505. The standalone selling price of the tablet is $263 (the cost to Waterway Company is $160). Waterway Company sells the Internet access service independently for an upfront payment of $296. On January 2, 2020, Waterway Company signed 100 contracts, receiving a total of $50,500 in cash. 2. Waterway Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $607. Waterway Company provides the 3-year tablet service plan as a separate product with a standalone selling…
- Waterway Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Waterway Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $505. The standalone selling price of the tablet is $263 (the cost to Waterway Company is $160). Waterway Company sells the Internet access service independently for an upfront payment of $296. On January 2, 2020, Waterway Company signed 100 contracts, receiving a total of $50,500 in cash. 2. Waterway Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $607. Waterway Company provides the 3-year tablet service plan as a separate product with a standalone selling…Splish Windows manufactures and sells custom storm windows for enclosed porches. Splish also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be provided by other vendors. Splish enters into the following contract on June 1, 2021, with a local homeowner. The customer purchases windows for a price of $4,600 and chooses Splish to do the installation. Splish charges the same price for the windows irrespective of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $1,800. The customer pays Splish $4,200 (which equals the fair value of the windows, which have a cost of $2,400) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on August 1, 2021, Splish completes installation on September 15, 2021, and the customer pays the balance due. (Round amounts to nearest dollar.) Prepare the journal entries…Crankshaft Company manufactures equipment. Crankshaft's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Crankshaft has the following arrangement with Winkerbean Inc. Winkerbean purchases equipment from Crankshaft for a price of $1,000,000 and contracts with Crankshaft to install the equipment. Crankshaft charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Crankshaft determines installation service is estimated to have a standalone selling price of $50,000. The cost of the equipment is $600,000. Winkerbean is obligated to pay Crankshaft the $1,000,000 upon the delivery…