On January 2,2019,Boulder Pointe Air Conditioning and Heating Sold and Installed

question 29

Essay

On January 2,2019,Boulder Pointe Air Conditioning and Heating sold and installed an HVAC system to DeMille Co.for $2,750.The selling price is allocated as follows: (1)90% for the HVAC unit and (2)10% for an ongoing 4-year service contract for the HVAC unit.
A.Determine each of the following related to this sale:
1.Identify the contract between the company and the customer.
2.Identify the performance obligations of Boulder Pointe.
3.Determine the transaction price.
4.Allocate the transaction price to the performance obligations.
B.What amount of revenue should Boulder Pointe recognize for the year ended December 31,2019?

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Definitions:

Gradual Buildup

The slow accumulation or increase of something over time.

Foot-in-the-door Technique

A persuasion strategy that involves getting a person to agree to a small request as a precursor to making a larger request.

Bait-and-switch Technique

A deceptive marketing strategy where a seller lures customers by advertising a product or service at a low price, then reveals that the specific item is no longer available, offering a more expensive alternative instead.

Luxury Penthouse

A high-end apartment located on the top floor of a building, offering luxurious features, expansive views, and premium amenities.