On July 15, 2018, Pablo Co. signed a contract to provide Xiaohua's Bakery with an ingredient-weighing system for a price of $90,000. The system included finely tuned scales that fit into Xiaohua's automated assembly line, Pablo's proprietary software modified to allow the weighing system to function in Xiaohua's automated system, and a one-year contract to calibrate the equipment and software on an as-needed basis. (Pablo Co competes with other vendors who offer ongoing calibration contracts for Pablo Co systems.) If Pablo Co was to provide these goods or services separately, it would charge $60,000 for the scales, $10,000 for the software, and $30,000 for the calibration contract. Pablo 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 Pablo Co recognize in 2018 for this contract?

$74,250

$0

$63,000

$90,000