rm the related installation service and provide a tech support for three-year period. AGI sells the license to the software, ins
AGI software inc entered into a $250,000 contract with mcdonald company to transfer a software license, perform the related installation service and provide a tech support for three-year period. AGI sells the license to the software, installation service, and tech support as a bundle of product for a lump-sum price. the installation service and tech support could be performed by other entities and there is a ready market for those services. the stand-alone prices for software, installation service, and tech support service were 160,000 20,000 and 30,000 per year (i.e., total of 90,000 for three years) respectively.
The contract was finalized on march 1 2020. AGI delivered the software license on april 1 2020 when its title was transferred to mcdonald. AGI completed installation on may 15 2020 at which point the tech support service will begin covering a period of three years.
Upon installation of software on may 15, mcdonald paid for the software, installation service, and one-year support service.
AGI's software fiscal years end on december 31
a) what are the performance obligations for the purpose of accounting for the sale of software?
b) if there is more than one performance obligation, should the contract revenue be allocated to various components of the contract by AGI? show work please
c) make the appropriate
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