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A company sold a machine to a customer, which contains the warranty required by state statute that the machine will perform at the agreed-upon level of specifications for a period of one year after purchase. In addition, the customer paid separately for the company to install the machine at its facility. The installation does not significantly modify the machine, and the installation services are readily available from third-party providers. The customer also paid for online access to a technical website maintained by the company; this service is offered separately to customers and gives them unlimited online access for two years after the purchase date. How many performance obligations should the company identify for the transaction? O A. One O B. Two O C. Three

A company sold a machine to a customer, which contains the warranty required by state statute that the machine will perform at the agreed-upon level of specifications for a period of one year after purchase. In addition, the customer paid separately for the company to install the machine at its facility. The installation does not significantly modify the machine, and the installation services are readily available from third-party providers. The customer also paid for online access to a technical website maintained by the company; this service is offered separately to customers and gives them unlimited online access for two years after the purchase date. How many performance obligations should the company identify for the transaction? O A. One O B. Two O C. Three

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company sold a machine to a customer, which contains the warranty required by state statute that the machine will perform at the agreed-upon level of specifications for a period of one year after purchase. In addition, the customer paid separately for the company to install the machine at its facility. The installation does not significantly modify the machine, and the installation services are readily available from third-party providers. The customer also paid for online access to a technical website maintained by the company; this service is offered separately to customers and gives them unlimited online access for two years after the purchase date. How many performance obligations should the company identify for the transaction? O A. One B. Two O C. Three OD. Four
Transcribed Image Text:A company sold a machine to a customer, which contains the warranty required by state statute that the machine will perform at the agreed-upon level of specifications for a period of one year after purchase. In addition, the customer paid separately for the company to install the machine at its facility. The installation does not significantly modify the machine, and the installation services are readily available from third-party providers. The customer also paid for online access to a technical website maintained by the company; this service is offered separately to customers and gives them unlimited online access for two years after the purchase date. How many performance obligations should the company identify for the transaction? O A. One B. Two O C. Three OD. Four
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