User Account

All Pages

Determine the number of performance obligations

Assignment Help Accounting Basics
Reference no: EM132681508

Question - Assume that TSA, Inc. entered into a contract with client Anon for $230,000 on January 1, Year 1, to transfer a software license and an additional $15,000 for installation of the software. The license entitles Anon to use the software in its current form over an unlimited period and does not include updates. Two years of customer support come free with the license. In recent stand-alone contracts with other customers for the same software, TSA has charged $200,000 for the software license, $40,000 for two-year customer support, and $20,000 for installation. The software is usable without customer support from TSA and it can be installed by other vendors. The installation is expected to take 250 hours, of which 150 hours will be required in Year 1 and the remainder in Year 2. The entire fee of $245,000 is collected on the contract date. Base your answers on the conceptual framework in ASC 606.

a. Determine the number of performance obligations, and the contract price to be allocated to each, in the following situations: i. The installation service does not modify the software. ii. Installation involves customizing the software to work seamlessly with other software used by the customer. As before, the installation can be performed by other firms as well.

b. Explain why your responses in i and ii above differ referring to ASC 606-10-55 (paras. 146 and 147) and 606-10-25 (paras. 14, 19, 20, and 21).

c. How much revenue will be booked in Years 1 and 2 from the contract in each case? Assume that all conditions for revenue recognition other than those specified have been met in the situations above.

Reference no: EM132681508

Questions Cloud

Process improvement framework and problem-solving framework : Compare and contrast the fundamental differences between process improvement framework and problem-solving framework.
What would be the effect on GNR investment : Assuming that GNR owned 80% of NXR instead of 100%, what would be the effect on GNR's investment in NMX account under the Equity Method
Calculate income tax liability : what do you feel you have learnt about yourself throughout your year at University and Calculate income tax liability in 2019/20 for Kate and for Ollie
Prepare the current assets section of the balance sheet : Raw Materials Factory Insurance $ 7,400 Inventory 1/1/14 $ 48,500. Prepare the current assets section of the balance sheet at December 31
Determine the number of performance obligations : Assume that TSA, Inc. entered into a contract with client Anon for $230,000 on January 1, Determine the number of performance obligations
Benchmark-southwest transit : What are the primary strengths of the team? What are its potential weaknesses? How positive is the management team about the team's potential?
What is the highest acceptable manufacturing cost : Sid's Skins makes a variety of covers for electronic organizers and portable music players. What is the highest acceptable manufacturing cost
Leadership and creative solutions : What symptoms of resistance to change have you experienced? Have you experienced both active and passive forms?
Have you ever had conflict within team : Have you ever had conflict within a team? Share about your experience and how the conflict was resolved or escalated.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd