Answer Happy

Buffalo Windows manufactures and sells custom storm windows for three-season porches. Buffalo also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors Buffalo enters into the following non-cancellable contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $4,300 and chooses Buffalo to do the installation. Buffalo charges the same price for the windows regardless of whether it does the installation or not. The customer pays Buffalo $3,504 (which equals the fair value of the windows, which have a cost of $1,400) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020 Buffalo completes installation on October 15, 2020, and the customer pays the balance due Part 1 Perform step 4 of the five-step process for revenue recognition Prepare the journal entries for Buffalo on July 1. September 1, and October 15, 2020, assuming Buffalo estimates the stand-alone value of the installation based on an estimated cost of $730 plus a margin of 20% on cost. (Credit account titles are automatically
Part 2 Prepare the journal entries for Buffalo on July 1, September 1, and October 15, 2020 given the uncertainty of finding skilled labour, Buffalo is unable to develop a reliable estimate for the fair value of the installation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.)