Course Hero Logo
Answered step-by-step

   . Marigold Company manufactures equipment. Marigold's products...

Image transcription text

Marigold Company manufactures equipment. Marigold's products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $400,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Marigold has the following arrangement with Henderson Inc. 0 Henderson purchases equipment from Marigold for a price of $1,020,000 and contracts with Marigold to install the equipment. Marigold charges the same price for the equipment irrespective of whether it does the installation or not. The cost of the equipment is $654,000. 0 Henderson is obligated to pay Marigold the $1,020,000 upon the delivery and installation of the equipment. Marigold delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately. Assuming Marigold does not have market data with which to determine the standalone selling price of the installation services. As a result, an expected cost plus margin approach is used. The cost of installation is $33,500; Marigold prices these services with a 25%

... Show more


Image transcription text

margin relative to cost. How should the transaction price of $1,020,000 be allocated among the service obligations? (Do not round intermediate calculations. Round final answers to O decimal places.) Equipment LA Installation $

... Show more


Answer & Explanation
Verified Solved by verified expert
Rated Helpful

sque dapibus effic

molestie consequat,

inia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam l

Unlock full access to Course Hero

Explore over 16 million step-by-step answers from our library

Subscribe to view answer
Step-by-step explanation

ipiscing elit. Nam lacinia pulvinar tor

inia pulvinar tort

lestie conseq




et, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentes

ultrices ac magna. Fusce dui lectus, congue vel laoreet ac

sque dapibus efficitur laoreet. Nam risus

rem ipsum dolor sit amet, consect

ctum vi


inia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laor

ia pulvinar tortor nec facilisis

risus ant


ec fac

Student review
100% (1 rating)
Thorough explanation
Easy to follow
Clear formatting