On 1 October 2020, ABC Limited sold three machines to a customer for a total amount of R 1 900 000. The three machines were delivered to the premises of the customer on the same day. Included in the sales contract are 1-year warranties for all three of the machines. A warranty for each of these machines may cost R 20 000 to obtain. The customer received a trade discount of 10 % for both tractors. ABC Limited awards a settlement discount of 6% to any customer who settles their account in full within 30 days of making a purchase. This particular customer often buys machinery from ABC Limited and based on past dealings with the customer ABC Limited expects that the customer will settle their account within 30 days. The customer settled their account in full on 3 November 2020. How many performance obligations are contained in the contract? 01 02 03 06

On 1 October 2020, ABC Limited sold three machines to a customer for a total amount of R 1 900 000. The three machines were delivered to the premises of the customer on the same day. Included in the sales contract are 1-year warranties for all three of the machines. A warranty for each of these machines may cost R 20 000 to obtain. The customer received a trade discount of 10 % for both tractors. ABC Limited awards a settlement discount of 6% to any customer who settles their account in full within 30 days of making a purchase. This particular customer often buys machinery from ABC Limited and based on past dealings with the customer ABC Limited expects that the customer will settle their account within 30 days. The customer settled their account in full on 3 November 2020. How many performance obligations are contained in the contract? 01 02 03 06

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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