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Rix Company sells home appliances and provides installation and service for its customers

Accounting

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Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2017, a customer purchased a dishwasher that Rix normally sells for $ 1,000. In addition, the customer purchased the installation service and a 3 year service contract, with stand alone selling prices of $ 200 and $ 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer $ 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2017. View Solution:
Rix Company sells home appliances and provides installation and service