Ginger Ltd is marketing a ‘surfing bundle’ in which, for $2200, it provides customers with a surfboard (which retails separately for $1700), a wetsuit (which retails separately for $500) and five lessons (which retail separately for $400). You are required to determine: a) Whether separate performance obligations exist, and to explain why you made this judgement. b) How much of the transaction price to allocate to each performance obligation?
Ginger Ltd is marketing a ‘surfing bundle’ in which, for $2200, it provides customers with a surfboard (which retails separately for $1700), a wetsuit (which retails separately for $500) and five lessons (which retail separately for $400). You are required to determine: a) Whether separate performance obligations exist, and to explain why you made this judgement. b) How much of the transaction price to allocate to each performance obligation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ginger Ltd is marketing a ‘surfing bundle’ in which, for $2200, it provides customers with a surfboard
(which retails separately for $1700), a wetsuit (which retails separately for $500) and five lessons
(which retail separately for $400). You are required to determine:
a) Whether separate performance obligations exist, and to explain why you made this
judgement.
b) How much of the transaction price to allocate to each performance obligation?
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