Skippers Landing sells boats and provides mooring facilities for its customers. Skippers Landing sells the boats for
Question:
Skippers Landing sells boats and provides mooring facilities for its customers. Skippers Landing sells the boats for $60,000 each and provides mooring facilities for $10,000 per year. It concludes that the goods and services are distinct and accounts for them as separate performance obligations. Skippers Landing enters into a contract to sell a boat and one year of mooring services to a customer for $65,000.. Skippers Landing sells the boats on a stand-alone basis for $58,000-$64,000 each. As a result, Skippers Landing determines that the stand-alone selling price for the boat is a range between $58,000 and $64,000.
Skippers Landing enters into a contract to sell a boat and one year of mooring services to a customer. The stated contract prices for the boat and the mooring services are $62,000 and $3,000, respectively.
Required:
How should Skippers Landing allocate the total transaction price of $65,000 to each performance obligation?
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw