Respuesta :
Answer:
1. Two performance
2. Journal entries
Explanation:
1. Delivery of Gold Bars and Insurance are the two performance obligations in this contract.
2. The Journal Entry is shown below:-
1. Cash Dr, $154,000
To Deferred revenue - Gold bars $146,300
To Deferred revenue - Insurance $7,700
(Being cash is received)
2. Deferred revenue - Gold bars $146,300
To Sales revenue $146,300
(Being Sales revenue is recorded)
3. Deferred revenue - Insurance $7,700
To Service revenue $7,700
(Being service revenue is recorded)
Total Standalone Prices = Value of Gold Bars + Standalone Selling Price of Insurance
= ($1,520 × 95) + ($80 × 95)
= $144,400 + $7,600
= $152,000
Each Performance Obligation Share:
Gold Bars = $144,400 ÷ $152,000 × 100
= 95%
Insurance Services = $7,600 ÷ $152,000 × 100
= 5%
Allocation of Total Selling price on the basis of Standalone Selling Prices
Gold Bars = $154,000 × 95%
= $146,300
Insurance Services = $154,000 × 5%
= $7,700
