Panarin Company entered into two contracts on the same date with Hjalmarsson Corporation. Pana has provided the following analysis of price and cost for the contracts: Hjalmarsson, the customer, may cancel both contracts if either of them is not fulfilled by Panarin in a timely manner. Stand-alone prices are typically $120,000 for the goods in Contract A and $80,000 for the goods in Contract B. Required:
1. Should the two contracts be combined for purposes of applying the 5-step revenue recognition model?
2. What amount of revenue should Panarin associate with each of the contracts?
3. When should revenue be recognized on each of the contracts?

Here are some missing parts of your question.

contract price for a = 125,000, for b = 80,000

cost of related goods for a = 70,000 for b = 55,000

Explanation:

1. Both contracts should be combined  for the the purpose of applying this model. so the answer is yes

2.

120000 + (5000 x 60%)

= 120000 + 3000

= $123000

80000  (5000 x 40%)

= 80000 + 2000

= $82000

from the question we were told that prices for Contract A is $120,000 while prices for Contract B is $80,000. the Contract price of Contract A put  to be $125,000. so we have $5,000 more that should be shared between the contracts a and b. so the obligations for goods from A is calculated to be  $123,000 and tht of contract B is $82,000.

c.

when control of goods is shifted to customer then the revenue has to be recognized

answer; ///(c) the way a government controls the supply,availability,and value of money;

the correct answer is - no.

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