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90) DA good or service is capable of being distinctif the seller regularly sells the good or serviceseparately, or the customer could use the goodor service on its own or in combination withother goods orservices it couldobtain elsewhere.91) DThe computer and maintenance services aredistinct, because they are both capable ofbeing distinct and are separately identifiable.Therefore, they qualify as performanceobligations. The total bundle price of $1,000would be allocated to each of them, with $610(computed as $1,000 × ($732 ÷ (732 + 468)))allocated to the computer, and $390(computed as $1,000 × ($468 ÷ (732 + 468)))allocated to the maintenance contract. DuringApril, Minarski has delivered the computerand one month ofmaintenance, so itshould recognizerevenue of $642.50(computed as $610+ ($390 × 1/12 ofthe duration of thecontract)).92) CThe computer and maintenance services aredistinct, because they are both capable ofbeing distinct and are separately identifiable.Therefore, they qualify as performanceobligations. The total bundle price of $1,000would be allocated to each of them, with $700(computed as $1,000 × ($840 ÷ (840 + 360)))allocated to the computer, and $300(computed as $1,000 × ($360 ÷ (840 + 360)))allocated to the maintenance contract. DuringApril, Minarski hasdelivered thecomputer and onemonth ofmaintenance, so itshould recognizerevenue of $725(computed as $700+ ($300 × 1/12 ofthe duration of theVersion 1263
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93) CGoods or services must be distinct to qualifyas performance obligations. To be distinct,goods or services must be both capable ofbeing distinct and separately identifiable. Thescales and software appear capable of beingdistinct, as they could be sold separately, butthey are not separately identifiable, as they areintegrated with each other and not useablewithout each other. The one-year calibrationcontract is capable of being distinct andseparately identifiable, as other vendors couldprovide similarservices. Therefore,the contract has twoperformanceobligations: thecombination of thescales and software,and the calibrationcontract.94) BThe scales will be allocated $40,392 oftransaction price (computed as $79,200 ×($51,000 ÷ ($51,000 + $10,000 + $39,000))).The software will be allocated $7,920 oftransaction price (computed as $79,200 ×($10,000 ÷ ($51,000 + $10,000 + $39,000))).The calibration contract will be allocated$30,888 of transaction price (computed as$79,200 × ($39,000 ÷ ($51,000 + $10,000 +$39,000))). The revenue for the scales andsoftware all would be recognized upondelivery on August 1, 2024. Since thecalibration contract has a one-year durationand commenced on August 1, service revenuefor five months hasbeen recognized in2024, equal to$12,870 (computedas $30,888 × 5/12).Therefore, totalrevenue recognizedin 2024 is $61,182(computed as$40,392 + $7,920 +$12,870).95) CVersion 1265
The scales will be allocated $54,000 oftransaction price (computed as $90,000 ×($60,000 ÷ ($60,000 + $10,000 + $30,000))).The software will be allocated $9,000 oftransaction price (computed as $90,000 ×($10,000 ÷ ($60,000 + $10,000 + $30,000))).
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