How many performance obligations are in this contract

Assignment Help Financial Accounting

Reference no: EM13905277

On May 1, 2016, Meta Computer, Inc., enters into a contract to sell 5,500 units of Comfort Office Keyboard to one of its clients, Bionics, Inc., at a fixed price of $140,000, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2016. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on experience , Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $11,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.80 per unit

Required:

1. How many performance obligations are in this contract?

2. Prepare the journal entry that Meta would record on May 1, 2016.

Reference no: EM13905277

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