PLEASE ANSWER STEP BY STEP THE COMPLETE QUESTION. DO NOT SKIP ANY PARTS.

Brady Appliances (BA) sells ovens, dishwashers and refrigerators and offers installation by BA employees. The installation could be done by others but most customers choose BA for the installation. A 12-month warranty is also included in the base price of all appliances. Customers can also choose to purchase an additional 24-month warranty. On April 23rd, 2018, Brady Appliances is entering into an agreement with Springdale Apartments Corporation (SA) to replace and install the kitchen appliances (the oven, dishwasher and refrigerator) in 250 apartments for a base price of $2,000 per apartment. Springdale upgraded the package to include the additional 24-month warranty for an additional $180 per package for a total package price of $2,180. Brady normally sells the oven separately for $800, the dishwasher for $600, the refrigerator for $1,000, installation for $100, and the extended warranty for $240. Full payment is due 15 months after the delivery/installation is completed. Springdale Apartments has an excellent credit rating and has always made payments on time. In order to avoid disruption of their tenants Brady must install the packages during the month of June (30 days) (when many of the tenants are on vacation). As an incentive to ensure the installation of the appliances on a timely basis Springdale Apartments is offering Brady Appliances the following incentives: Completion of installation by June 21st: $30,000 Bonus Completion of installation by June 25th $20,000 Bonus Completion of installation by June 28th $10,000 Bonus Completion of installation by June 30th $0 Bonus Brady Appliances estimates that based upon their significant experience in the industry they have a 75% likelihood of completing the installation within 21 days, 15% likelihood within 25 days, 5% likelihood the installation will be completed within 28 days and 5% likelihood the installation will be completed on time (i.e. June 30th). Interest rates on comparable projects are 6% and is equal to $30,000. Brady Appliances fiscal year is January 1-December 31 and is publicly traded. Required: 1. Apply the requirements of revenue from contracts with customers. Make sure you apply the detailed guidance from the codification. 2. For each of the five steps: Describe how the revenue model applies to this transaction. If any step that is not applicable simply indicate that it is not applicable. Clearly label all of your work. 3. Determine the amount/timing of revenue that should be recognized and provide any necessary journal entry/(ies).

THIS IS WHAT I HAVE DONE SO FAR, YOU CAN TAKE HINTS FROM THIS

Step 1: Identify the contract with the customer

Approval and commitment Both parties enter to an agreement on April 23^rd, 2018

Identification of the rights of the parties Springdale has the right to the kitchen appliances and installation service. Brady has right to payment after delivery and installation.

Identification of payment terms Contract price is $545,000 required after delivery and installation ($2,180 including the additional warranty * 250 apartments). Incentive of $30,000 if completed by June 21^st, Incentive of $20,000 if completed by June 25^th, and Incentive of $10,000 if completed by June 28^th.

The contract has commercial substance Springdale is exchanging payment for the appliances and installation by Brady Appliances.

It is probable that the consideration will be collected Springdale has excellent credit rating and has always made payments on time. The consideration of full payment is paid after installation and delivery.

Conclusion: There is a valid, agreed upon contract with the customer due to all 5 criteria being met.

Step 2: Identify the performance obligation

There are five performance obligations for Brady Appliances, which are the three different appliances, installation, and warranty. There are separate and distinct because Springdale can purchase each of goods and services separately.

Conclusion: There are five performance obligations.

Step 3: Determine the transaction price

There is a variable consideration for the transaction price, because there is an incentive existence. Depending on the installation completion by Brady, the total transaction price might vary.

Calculation:

Installation Completion	Bonus	Transaction Price	Probability
June 21st	$30,000	$575,000 ($545,000+$30,000)	75%	$431,250
June 25th	$20,000	$565,000 ($545,000+$20,000)	15%	$84,750
June 28th	$10,000	$555,000 ($545,000+$10,000)	5%	$27,750
June 30th	$0	$545,000	5%	$27,250
			Estimated Transaction Price:	$571,000

Conclusion: The estimated transaction price is $571,000

Step 4: Allocate the transaction price to the performance obligation

Completion of Installation	Bonus	Probability	Price	Revenue	Probability	Expected Value
June 21st	$30,000	75%
June 25th	$20,000	15%
June 28th	$10,000	5%
June 30th	$0	5%

There are five performance obligations, so allocation is necessary.