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How should the transaction price be allocated to equipment

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Reference no: EM132731129

Problem 1: When does a company satisfy a performance obligation?

a) The company has a right to payment for the asset.

b) The company transferred legal title to the asset.

c) The company transferred physical possession of the asset.

d) All of above

Problem 2: Fuhremann Co. is a full-service manufacturer of surveillance equipment. Customers can purchase any combination of equipment, installation services, and training as part of Fuhremann's security services. Thus, each of these performance obligations are separate with individual standalone selling prices. Laplante Inc. purchased cameras, installation, and training at a total price of $80,000. Estimated standalone selling prices of the equipment, installation, and training are $90,000, $7,000, and $3,000, respectively. How should the transaction price be allocated to the equipment, installation, and training?

a) Equipment $70,000, installation $6,000, and training $4,000.

b) Equipment $71,000, installation $6,500, and training $3,500.

c) Equipment $72,000, installation $5,600, and training $2,400.

d) Equipment $72,500, installation $5,900, and training $1,600.

Reference no: EM132731129

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