Eugene Co.has inventory it purchased for $6,000.It sells the inventory to a customer for $10,000,including installation.Installation sold separately costs $1,000 and the inventory sold separately costs $10,000.What amount of Sales Revenue is recognized by Eugene when delivery of the inventory has been made to the customer,but the installation has not been completed?
A)$10,000
B)$9,091
C)$9,000
D)$909

Question

Quizplus · Accepted Answer

There are 2 performance obligations so the sales price is allocated to each performance obligation.$10,000/($1,000 + $10,000)= 0.9091;$10,000 × 0.9091 = $9,091.

Eugene CoHas Inventory It Purchased for $6,000