Ön July 15, 2020, Dahlin signed a contract to provide Sabre-Fresh Baking Co. with 100 ingredient-weighing systems for a price of $900 each. Each system includes finely tuned scales, a computer terminal, and a one-year (12 month) contract to service Sabre-Fresh's automated equipment on an as-needed basis. The scales, computers, and service contracts are all separately identifiable and are capable of being used on their own or with products obtained from other sources. If Dahlin was to provide these goods or services separately, it would charge $600 for the scales, $100 for the computer, and $300 for the service contract. Dahlin delivered and installed the scales and computers on August 1, 2020, and the service contract began on that date. Answer the following questions in the box below, numbering your answers to keep consistent with the questions asked: Q1: How many performance obligations are included in this contract? Q2: What is the transaction price? Q3: How much of the transaction price is allocated to each of the performance obligations based on their stand-alone selling price? (In the box below, write the respective performance obligations followed by their allocated transaction price. E.g. Computer $50,000; Customer Service $80,000) Q4: Record the appropriate journal entry or entries (if any) on July 15 , 2020. Q5: Record the appropriate journal entry or entries (if any) on August 1, 2020. Q6: Record the appropriate journal entry or entries (if any) on August 31, 2020.
Ön July 15, 2020, Dahlin signed a contract to provide Sabre-Fresh Baking Co. with 100 ingredient-weighing systems for a price of $900 each. Each system includes finely tuned scales, a computer terminal, and a one-year (12 month) contract to service Sabre-Fresh's automated equipment on an as-needed basis. The scales, computers, and service contracts are all separately identifiable and are capable of being used on their own or with products obtained from other sources. If Dahlin was to provide these goods or services separately, it would charge $600 for the scales, $100 for the computer, and $300 for the service contract. Dahlin delivered and installed the scales and computers on August 1, 2020, and the service contract began on that date. Answer the following questions in the box below, numbering your answers to keep consistent with the questions asked: Q1: How many performance obligations are included in this contract? Q2: What is the transaction price? Q3: How much of the transaction price is allocated to each of the performance obligations based on their stand-alone selling price? (In the box below, write the respective performance obligations followed by their allocated transaction price. E.g. Computer $50,000; Customer Service $80,000) Q4: Record the appropriate journal entry or entries (if any) on July 15 , 2020. Q5: Record the appropriate journal entry or entries (if any) on August 1, 2020. Q6: Record the appropriate journal entry or entries (if any) on August 31, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On July 15, 2020, Dahlin signed a contract to provide Sabre-Fresh Baking Co. with
100 ingredient-weighing systems for a price of $900 each. Each system includes
finely tuned scales, a computer terminal, and a one-year (12 month) contract to
service Sabre-Fresh's automated equipment on an as-needed basis. The scales,
computers, and service contracts are all separately identifiable and are capable of
being used on their own or with products obtained from other sources. If Dahlin was
to provide these goods or services separately, it would charge $600 for the scales,
$100 for the computer, and $300 for the service contract. Dahlin delivered and
installed the scales and computers on August 1, 2020, and the service contract
began on that date. Answer the following questions in the box below, numbering
your answers to keep consistent with the questions asked:
Q1: How many performance obligations are included in this contract?
Q2: What is the transaction price?
Q3: How much of the transaction price is allocated to each of the performance
obligations based on their stand-alone selling price? (In the box below, write the
respective performance obligations followed by their allocated transaction price. E.g.
Computer $50,000; Customer Service $80,000)
Q4: Record the appropriate journal entry or entries (if any) on July 15, 2020.
Q5: Record the appropriate journal entry or entries (if any) on August 1, 2020.
Q6: Record the appropriate journal entry or entries (if any) on August 31. 2020.
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