Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please be as detailed as possible in explaining each step. On July 15, 2016, Ortiz & Co. signed a contract to provide Ever Fresh Bakery
Please be as detailed as possible in explaining each step.
On July 15, 2016, Ortiz & Co. signed a contract to provide Ever Fresh Bakery with an ingredient weighing system for a price of $90,000. The system included finely tuned scales that fit into Ever Fresh's automated assembly line, Ortiz's proprietary software modified to allow the weighing system to function in Ever Fresh s 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 Ortiz's systems.) If Ortiz was to provide these goods and services separately, 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 equipment and software on August 1, 2016, 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 2016 for this contractStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started