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Bella Pool Company sells prefabricated pools that cost $80,000 to customers for $144,000. The sales price includes an installation fee, which is valued at $20,000. The fair value of the pool is $128,000.
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Bella Pool Company sells prefabricated pools that cost $80,000 to customers for $144,000. The sales price includes an installation fee, which is valued at $20,000. The fair value of the pool is $128,000. 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

User Laurapons
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Answer:

The transaction price allocated to the pool and the installation is $124,540.54 and $19,459.46 respectively.

Step-by-step explanation:

Price Allocation to Pool = $144,000 * (128,000 / (128,000 + 20,000))

Price Allocation to Pool = $144,000 * 0.864865

Price Allocation to Pool = $124,540.54

Price Allocation to Installation = $144,000 * (20,000 / (128,000 + 20,000))

Price Allocation to Installation = $144,000 * 0.135135

Price Allocation to Installation = $19,459.46

User Lambfrier
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