milbank appliance corporation mac sells major appliances such as refrigerators stoves etc at retail mac sells its top line home refrigerator

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Required:
Explain how revenue should be recognized in each of the following situations. Use the relative fair value method. Be specific, with calculations.
a. MAC sells a refrigerator with a three- year extended warranty for $ 8,000.
b. For a total price of $ 9,000, MAC sells a refrigerator together with the control panel one-year extended warranty and a three- year extended warranty.