Homework SourseE 53 Allocating transaction price LO54g Video Planet VP sell
E 5-3 Allocating transaction price LO5-4g Video Planet (VP) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with of the customer\'s home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for SI,700, sells the remote separately for $100, and offers the installation service separately for $200. The entire package sells for $1,900. other parts Required: How much revenue would be allocated to the TV, the remote, and the installation service?
Solution
TV: $1,615
Remote: $95
Installation: $190
| FMV | % of FMV | Package | Revenue Allocation | |
| TV | $1,700 | 85% | $1,900 | $1,615 |
| Remote | $100 | 5% | $1,900 | $95 |
| Installation | $200 | 10% | $1,900 | $190 |
| $2,000 | 100% | $1,900 |
