Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On July 15, 20X1, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient- weighing system for a price of $90,000. The

image text in transcribed
On July 15, 20X1, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient- weighing system for a price of $90,000. The system included finely tuned scales that fit into EverFresh's automated assembly line, Ortiz's proprietary software which allowed the scales to function in EverFresh's automated system, and a one-year contract to calibrate (clean and adjust) the weighing system on an as-needed basis. (Ortiz competes with other vendors who offer ongoing calibration contracts for Ortiz's systems.) If these goods and services were provided separately, Ortiz estimates it would charge $60,000 for the scales, $10,000 for the software, and $30,000 for the calibration contract. Ortiz delivered and installed the scales and software on August 1, 20X1, and the calibration service commenced on that date. How many performance obligations are contained in this contract? Explain your answer; be specific and complete

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 and Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

13th edition

1285866304, 978-1285866307

Students also viewed these Accounting questions