Assume that the scales,software and calibration service are all separate performance obligations.How much revenue will Ortiz recognize in 2016 for this contract?

Question

Quizplus · Accepted Answer

The contract price is $90,000. However, Ortiz cannot recognize the revenue for the entire contract price until they deliver on all three performance obligations. As of the end of 2016, only two of the three performance obligations have been completed, so Ortiz can only recognize revenue for those two obligations. The completed obligations are the sale of scales for $30,000 and the software license for $44,250, resulting in a total recognized revenue of $74,250 in 2016. Therefore the best choice is C.

Assume That the Scales,software and Calibration Service Are All Separate