On January 1, Year 1, a furniture wholesale company agreed to sell 10 identical couches to a
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Question:
On January 1, Year 1, a furniture wholesale company agreed to sell 10 identical couches to a customer at a price of $1,000 per couch. The entity transfers control of each couch at the point in time it is delivered to the customer. By July 1, Year 1, 6 couches had been provided to the customer. On that date, the customer offered to purchase 2 additional couches of the same model at a price of $950 per couch. The company agreed to accommodate the customer's request and provided 6 additional couches to the customer on October 1, Year 1.
How much revenue, if any, should be allocated to each agreement in the December 31, Year 1, financial statements?
| January 1, Year 1 agreement | July 1, Year 1 agreement |
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