DGA Associates,Inc.sells computer workstations designed for architects.In 2016,it sold 120 workstations for $360,000.For each workstation sold,DGA distributed a 40% discount coupon for any additional future purchases made in the next 12 months.Based on historical experience,DGA expects that approximately 30% of the coupons will be utilized,and the goods purchased with the coupons would normally sell for $350.
Required:
(a)How many performance obligations are in a contract to purchase a computer workstation? Explain the reasons for your answer.
(b)Prepare a journal entry to record revenue for the sale of 120 computer workstations,assuming that DGA uses the residual method to estimate the stand-alone selling price of the workstations sold without the discount coupon.

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The Answer of DGA Associates,Inc.sells computer workstations designed for architects.In 2016,it sold 120 workstations for $360,000.For each workstation sold,DGA distributed a 40% discount coupon for any additional future purchases made in the next 12 months.Based on historical experience,DGA expects that approximately 30% of the coupons will be utilized,and the goods purchased with the coupons would normally sell for $350.
Required:
(a)How many performance obligations are in a contract to purchase a computer workstation? Explain the reasons for your answer.
(b)Prepare a journal entry to record revenue for the sale of 120 computer workstations,assuming that DGA uses the residual method to estimate the stand-alone selling price of the workstations sold without the discount coupon.