On March 1, 2018, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units ofcertified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink’s, a third-party carrier. In addition, Gold Examiner has agreed to provide areplacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is$1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60per unit. Brink’s picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred onApril 1.Required:1. How many performance obligations are in this contract?
On March 1, 2018, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of
certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink’s, a third-party carrier. In addition, Gold Examiner has agreed to provide a
replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is
$1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60
per unit. Brink’s picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on
April 1.
Required:
1. How many performance obligations are in this contract?
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