Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On July 15, 2018, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient-weighing system for a price of $85,200. The system

On July 15, 2018, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient-weighing system for a price of $85,200. The system included finely tuned scales that fit into EverFreshs automated assembly line, Ortizs proprietary software modified to allow the weighing system to function in EverFreshs automated system, and a one-year contract to calibrate the equipment and software on an as-needed basis. (Ortiz competes with other vendors who offer ongoing calibration contracts for Ortizs systems.) If Ortiz was to provide these goods or services separately, it would charge $56,000 for the scales, $10,000 for the software, and $34,000 for the calibration contract. Ortiz delivered and installed the equipment and software on August 1, 2018, and the calibration service commenced on that date. Assume that the scales, software and calibration service are all separate performance obligations. How much revenue will Ortiz recognize in 2018 for this contract?

Multiple Choice

  • $56,232

  • $85,200

  • $68,302

  • $0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Reporting Exam Kit Kaplan Approved Acca

Authors: Kaplan Publishing

1st Edition

9781787404137

More Books

Students also viewed these Accounting questions