In: Accounting
Price of one package deal = $700
Down payment = $700 x 100 x 10% = $7,000
When there is multiple obligations on a single contract. Sales price is fixed on proportion to its standalobne price
Price of Coffee machine = $600/$800 x $750 = $562.5
Price of Subscription app = $200/$800 x $750 = $187.5
Further revenue is recognised only on completion of performance obligation.So for sale the relevant date is upon delivery. For the Subscription it is recognised proportionately.
Revenue to be recognised during 20x4 = ($187.5 x 100) / 12 x 1 = $1,562.50
Date | Debit | Credit | |
1 Nov 20x4 | Cash | $ 7,000.00 | |
Customer deposit | $ 7,000.00 | ||
1 Dec 20x4 | Customer deposit | $ 7,000.00 | |
Accounts Receivable | $ 49,250.00 | ||
Sales Revenue | $ 56,250.00 | ||
31 Dec 20x4 | Accounts Receivable | $ 1,562.50 | |
Sales Revenue | $ 1,562.50 |