In Class Problems Chapter 6 Problem 1 An entity sells computers. In addition to the computer, they sell an three year maintenance contract whereby they will repair the computer at no charge to the customer if the computer breaks down in the three years following purchase The stand alone selling prices for the computer and the maintenance contract are $3,000 and $600 respectively. A customer who purchases the computer and maintenance contract together pays $3,450 for both. Required- Using the 5 step analysis to recognize revenue, how would you recognize the revenue of one sale of computer and maintenance contract. 1) Identify the contract with the customer 2) Identify the separate performance obligations in the contract 3) Determine the transaction price 4) Allocate the transaction price to the separate performance obligations in the contract 5) Recognize revenue when (or as) the entity satisfies each performance obligation