Oriole Company sells prefabricated pools that cost $71000 to customers for $1220

Question

Oriole Company sells prefabricated pools that cost $71000 to customers for $122085. The sales price includes an installation fee, which is valued at $17800. The fair value of the pool is $117850. The installation is considered a separate performance obligation and is expected to take 3 months to complete. The transaction price allocated to the pool and the installation is

$122085 and $17800 respectively $106065 and 16020 respectively $97613 and $24472 respectively $117850 and $17800 respectively

Explanation / Answer

B.$106065 and 16020 respectively

total of fair values = $17800 + 117850 =>$135,650.

price allocated = (fair value of asset / total fair value) * selling price

price allocated to pool = ($117850 / 135650) * 122085 =>$106065

price allocated to installation = (17800 / 135650)*122085 =>$16020

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.