Question

2 Onwa Motors sacar dealership that has two types of operation car sales and service. The two divisions operate independently
Onwa Motors is a car dealership that has two types of operations a nd service The visions perindependent at the showroom is D
Requirement. The service shop offers the service packages to other word s of where they there was the car $1.00 and for the p


Onta Motors is a car dealership that has two types of operations: car sales and service. The two divisions operate independen
Requirement a. Assume that the three prices (for car, basic service package, increment for premium service package) reliably
Next, complete the table to record revenue in a manner that reflects the timing of the delivery. (Round your answers to the n
Requirement b. Similar to part (a), assume that the component prices reliably reflect their stand-alone selling prices, excep
Next, determine the timing of the revenue recognition for the two car components. (Round your answers to the nearest cent. Fo
Requirement c. The service shop also offers the service packages to other car owners regardless of where they purchased their
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Answer #1
As per the given information Onta Motors has a car dealership and given the information of
stand alone prices, selling prices after negotiations.
Requirement a. Component
Component Stand-alone selling
Stand-alone selling Price as *Actual =
Price percentage of total Sale price Allocation
Car 45200 89.3281 % 46100 41180
Basic service package (2 Years) 3200 6.3241 % 46100 2915
Interim for premium service package (4 years) 2200 4.3478 % 46100 2004
50600 100 %
Upon Delivery Year 1 Year 2 Year 3 Year 4
Car 41180 0 0 0 0
Basic service package (2 Years) 0 1458 1458 0 0
Interim for premium service package (4 years) 0 501 501 501 501
Requirement b. Component
Component Stand-alone selling
Stand-alone selling Price as *Actual =
Price percentage of total Sale price Allocation
Car 45200 89.3281 % 46100 41180
Premium service package 5400 10.6719 % 46100 4920
50600
Upon Delivery Year 1 Year 2 Year 3 Year 4
Car 41180 0 0 0 0
Premium service package 0 1230 1230 1230 1230
Requirement c.
Total sale price
Total sale price 49500
Less: Basic Package 1700
Less: Increment premium package 1800
46000 Average of $44000 and $48000
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