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Bella Pool Company sells prefabricated pools that cost $100,000 to customers for $180,000. The sales price includes an installation fee, which is valued at $25,000. The fair value of the pool is $160,000. 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:

(A) $155,676 and $24,324 respectively
(B) $160,000 and $25,000 respectively
(C) $180,000 and $25,000 respectively
(D) $138,378 and $21,622 respectively

Respuesta :

Answer:

correct option is (A) $155,676 and $24,324 respectively

Explanation:

solution

we will find here transaction price allocated to pool and installation that is

transaction price allocated = ( price charged ÷ sum of prices ) × individual price  ............................1

put here value we get

transaction price allocated = [tex]\frac{180000}{185000}[/tex] × 160000

transaction price allocated =$155676

and

installation price = ( price charged ÷ sum of prices ) × instillation fee

installation price =  [tex]\frac{180000}{185000}[/tex] × 25000

installation price =  $24324

so correct option is (A) $155,676 and $24,324 respectively

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