Problem
Wildhorse Appliance Co. manufactures low-price, no-frills appliances that are in great demand for rental units. Pricing and cost information on Wildhorse's main products are as follows.
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Item
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Stand-Alone Selling Price (Cost)
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Refrigerator
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$530 ($245)
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Range
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$590 ($295)
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Stackable washer/dryer unit
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$740 ($415)
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Customers can contract a purchase either individually at the stated prices or for a three-item bundle with a price of $1,900. The bundle price includes delivery and installation. Wildhorseprovides delivery and installation as a stand-alone service for any of its products for $70. The company follows IFRS.
Ivanhoe Property Managers operates upscale student apartment buildings. On May 1, 2023, Wildhorse signs a contract with Ivanhoe for 260 appliance bundles to be delivered and installed in one of its new buildings. Ivanhoe pays 20% cash at contract signing and will pay the balance on delivery and installation, no later than August 1, 2023. Prepare journal entries for Wildhorse on May 1, 2023, and August 1, 2023, when all appliances are delivered and installed.