Antonio's Car Services provides maintenance services for motorized vehicles.In March 2016,Rick placed an order for a new set of tires for $350.When a customer purchases goods and services in excess of $300,Antonio's gives the customer a 25% discount coupon for future purchases made in the next three months.Antonio's estimates that approximately 80% of customers utilize the coupon and that on average those customers will purchase goods and services that typically sell for $75.
Required:
(a)How many performance obligations are in Rick's contract? Explain the reasons for your answer.
(b)Prepare a journal entry to record revenue for this transaction,assuming that Antonio's uses the residual method to estimate the stand-alone selling price of new tires sold without the discount coupon.

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The Answer of Antonio's Car Services provides maintenance services for motorized vehicles.In March 2016,Rick placed an order for a new set of tires for $350.When a customer purchases goods and services in excess of $300,Antonio's gives the customer a 25% discount coupon for future purchases made in the next three months.Antonio's estimates that approximately 80% of customers utilize the coupon and that on average those customers will purchase goods and services that typically sell for $75.
Required:
(a)How many performance obligations are in Rick's contract? Explain the reasons for your answer.
(b)Prepare a journal entry to record revenue for this transaction,assuming that Antonio's uses the residual method to estimate the stand-alone selling price of new tires sold without the discount coupon.

Antonio's Car Services Provides Maintenance Services for Motorized Vehicles