O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary club-fittingservices. A full set of clubs with the fitting services sells for $1,500. O’Hara sells the same clubs without thefitting service for $1,400. Assuming that the golf clubs and the club-fitting services are separate performanceobligations, estimate the stand-alone selling price of the club fitting services using the residual approach.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 3C
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O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary club-fitting
services. A full set of clubs with the fitting services sells for $1,500. O’Hara sells the same clubs without the
fitting service for $1,400. Assuming that the golf clubs and the club-fitting services are separate performance
obligations, estimate the stand-alone selling price of the club fitting services using the residual approach.

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