Baldi Piano manufactures customized pianos for concert halls. On July 1, 2021, Baldi signed a contract to deliver a concert piano for $150,000. Under the contract, Baldi is also obligated to provide a one-year maintenance service. If sold separately, the piano and the maintenance service would have cost $140,000 and $20,000, respectively. How much of the transaction price would be allocated to the piano and the maintenance service, assuming they are separate performance obligations? Record the journal entry pertaining to the contract on July 1, 2021 assuming that the piano is delivered on that date and the sale is on account.

Baldi Piano manufactures customized pianos for concert halls. On July 1, 2021, Baldi signed a contract to deliver a concert piano for $150,000. Under the contract, Baldi is also obligated to provide a one-year maintenance service. If sold separately, the piano and the maintenance service would have cost $140,000 and $20,000, respectively. How much of the transaction price would be allocated to the piano and the maintenance service, assuming they are separate performance obligations? Record the journal entry pertaining to the contract on July 1, 2021 assuming that the piano is delivered on that date and the sale is on account.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 8C

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