Blossom Company manufactures products ranging from simple automated machinery to complex systems containing numerous components. Unit...
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Blossom Company manufactures products ranging 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 orde for the installed equipment to perform to specifications. Blossom has the following arrangement with Wildhorse Inc. Wildhorse purchases equipment from Blossom for a price of $979,200 and contracts with Blossom to install the equipment. Blossom charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Blossom determines installation service is estimated to have a standalone selling price of $40,800. The cost of the equipment is $640,000. Wildhorse is obligated to pay Blossom the $979,200 upon the delivery of the equipment. Blossom delivers the equipment on June 1, 2025, and completes the installation of the equipment on September 30, 2025. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately. Your answer is correct. How should the transaction price of $979,200 be allocated among the performance obligations? (Do not round intermediate calculations. Round final answers to O decimal places, e.g. 5,275.) Equipment $ 940032 Installation $ 39168 eTextbook and Media SUPPORT (b) Prepare the journal entries for Blossom for this revenue arrangement on June 1, 2025 and September 30, 2025, assuming Blossom receives payment when the equiptment is delivered. (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. List all debit entries before credit entries. Record journal entries in the order presented in the problem. Round answers to O decimal places, e.g. 5,275.) Date June 1, 2025 Account Titles and Explanation No Entry No Entry No Entry (To record sales). Debit 0 Credit No Entry (To record sales) June 1, 2025 v Cash iep. 30, 2025 Unearned Sales Revenue (To record cost of goods sold) Unearned Sales Revenue Sales Revenue eTextbook and Media List of Accounts S Blossom Company manufactures products ranging 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 orde for the installed equipment to perform to specifications. Blossom has the following arrangement with Wildhorse Inc. Wildhorse purchases equipment from Blossom for a price of $979,200 and contracts with Blossom to install the equipment. Blossom charges the same price for the equipment irrespective of whether it does the installation or not. Using market data, Blossom determines installation service is estimated to have a standalone selling price of $40,800. The cost of the equipment is $640,000. Wildhorse is obligated to pay Blossom the $979,200 upon the delivery of the equipment. Blossom delivers the equipment on June 1, 2025, and completes the installation of the equipment on September 30, 2025. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately. Your answer is correct. How should the transaction price of $979,200 be allocated among the performance obligations? (Do not round intermediate calculations. Round final answers to O decimal places, e.g. 5,275.) Equipment $ 940032 Installation $ 39168 eTextbook and Media SUPPORT (b) Prepare the journal entries for Blossom for this revenue arrangement on June 1, 2025 and September 30, 2025, assuming Blossom receives payment when the equiptment is delivered. (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. List all debit entries before credit entries. Record journal entries in the order presented in the problem. Round answers to O decimal places, e.g. 5,275.) Date June 1, 2025 Account Titles and Explanation No Entry No Entry No Entry (To record sales). Debit 0 Credit No Entry (To record sales) June 1, 2025 v Cash iep. 30, 2025 Unearned Sales Revenue (To record cost of goods sold) Unearned Sales Revenue Sales Revenue eTextbook and Media List of Accounts S
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