Buffalo Windows manufactures and sells custom storm windows forthree-season porches. Buffalo also provides installation...

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Buffalo Windows manufactures and sells custom storm windows forthree-season porches. Buffalo also provides installation servicefor the windows. The installation process does not involve changesin the windows, so this service can be performed by other vendors.Buffalo enters into the following contract on July 1, 2017, with alocal homeowner. The customer purchases windows for a price of $2,470 and chooses Buffalo to do the installation. Buffalo chargesthe same price for the windows irrespective of whether it does theinstallation or not. The installation service is estimated to havea standalone selling price of $ 580. The customer pays Buffalo $1,940 (which equals the standalone selling price of the windows,which have a cost of $ 1,050) upon delivery and the remainingbalance upon installation of the windows. The windows are deliveredon September 1, 2017, Buffalo completes installation on October 15,2017, and the customer pays the balance due.
(a) Buffalo estimates the standalone selling price of theinstallation based on an estimated cost of $ 450 plus a margin of30% on cost. Prepare the journal entries for Buffalo in 2017.
(b) Given uncertainty of finding skilled labor, Buffalo isunable to develop a reliable estimate for the standalone sellingprice of the installation. Prepare the journal entries for Buffaloin 2017.

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Solution a Buffalo estimates the standalone selling price of the installation based on an estimated cost of 450 plus a margin of 30 on cost Prepare the journal entries for Buffalo in 2017 Fair value standalone price of installation standalone price of windo 450 450 10 1940 450 45 1940 2435 Fair value 2435 Date Accounts title and explanation Debit Credit July 1 2017 No entry september See Answer

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In: AccountingBuffalo Windows manufactures and sells custom storm windows forthree-season porches. Buffalo also provides installation service...Buffalo Windows manufactures and sells custom storm windows forthree-season porches. Buffalo also provides installation servicefor the windows. The installation process does not involve changesin the windows, so this service can be performed by other vendors.Buffalo enters into the following contract on July 1, 2017, with alocal homeowner. The customer purchases windows for a price of $2,470 and chooses Buffalo to do the installation. Buffalo chargesthe same price for the windows irrespective of whether it does theinstallation or not. The installation service is estimated to havea standalone selling price of $ 580. The customer pays Buffalo $1,940 (which equals the standalone selling price of the windows,which have a cost of $ 1,050) upon delivery and the remainingbalance upon installation of the windows. The windows are deliveredon September 1, 2017, Buffalo completes installation on October 15,2017, and the customer pays the balance due.(a) Buffalo estimates the standalone selling price of theinstallation based on an estimated cost of $ 450 plus a margin of30% on cost. Prepare the journal entries for Buffalo in 2017.(b) Given uncertainty of finding skilled labor, Buffalo isunable to develop a reliable estimate for the standalone sellingprice of the installation. Prepare the journal entries for Buffaloin 2017.