An entity sells four construction products and services. The stand-alone or individual selling prices of the products are: Electrical/wiring - ₦124,000, Plumbing - ₦170,000, Laying of Foundation up to roofing - ₦461,200, Fence and gate - ₦182,840.
The entity sells each of the four products for ₦885,040 to Value for Money Limited.
The plumbing and electrical are usually sold together for ₦241,000. The entity sells the foundation laying to roofing for ₦461,200 and the fence and gate for ₦182,840. The contract does not require the delivery of plumbing and electrical at the same time.
The electrical, plumbing, laying of foundation to roofing are separate performance obligations.
Allocate the discount received by the customer.
Round up all answers to 2 decimal places.
See the suggested solution to practice activity 13.26 here.
Suggested solution to practice activity 13.26
Electrical/wiring:
Stand-alone selling price ₦124,000
Allocated discount (N124,000 * N53,000/294,000) (₦22,353.74)
Allocated transaction price ₦101,646.26
Plumbing:
Stand-alone selling price ₦170,000
Allocated discount (N170,000 * N53,000/294,000) (₦30,646.26)
Allocated transaction price ₦139,353.74
Fence and gate ₦182,840
Laying of Foundation up to roofing:
Separate selling price ₦461,200
Apportioned discount -
Transaction price allocated ₦461,200
Fence and gate:
Separate selling price ₦182,840
Apportioned discount -
Transaction price allocated ₦182,840
Total stand-alone selling price:
₦124,000 + ₦170,000 + ₦461,200 + ₦182,840 = ₦938,040
Total allocated transaction price:
Electrical/wiring ₦101,646.26
Plumbing ₦139,353.74
Laying of Foundation up to roofing ₦461,200.00
Fence and gate ₦182,840.00
₦885,040.00
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