When recording consideration transferred for the acquisition of Rhine on January 1, 2017, Harrison will record a contingent performance obligation in the amount of:
A) $ 628.40
B) $ 2,671.60
C) $ 3,142.00
D) $13,358.00
E) $16,500.00

Question

Quizplus · Accepted Answer

Harrison will record a contingent performance obligation in the amount of $3,142.00. This is calculated as 4% of the $78,550 excess payment made by Harrison for the acquisition of Rhine ($1,970,000 - $1,891,450) as per the acquisition agreement.

When Recording Consideration Transferred for the Acquisition of Rhine on January