Reference no: EM132461138

Skippers Landing sells boats and provides mooring facilities for its customers. Skippers Landing sells the boats for $60,000 each and provides mooring facilities for $10,000 per year. It concludes that the goods and services are distinct and accounts for them as separate performance obligations. Skippers Landing enters into a contract to sell a boat and one year of mooring services to a customer for $65,000.. Skippers Landing sells the boats on a stand-alone basis for $58,000-$64,000 each. As a result, Skippers Landing determines that the stand-alone selling price for the boat is a range between $58,000 and $64,000.

• Skippers Landing enters into a contract to sell a boat and one year of mooring services to a customer. The stated contract prices for the boat and the mooring services are $62,000 and $3,000, respectively.

Required:

Question 1: How should Skippers Landing allocate the total transaction price of $65,000 to each performance obligation?