Precision Equipment, Inc., specializes in designing and installing customized manufacturing equipment. On February 1, 2018, it signs a contract to design a fully automated wristwatch assembly line for $2 million, which willbe settled in cash upon completion of construction. Precision Equipment will install the equipment on the client’sproperty, furnish it with a customized software package that is integral to operations, and provide consulting services that integrate the equipment with Precision’s other assembly lines. How many performance obligations existin this contract?
Precision Equipment, Inc., specializes in designing and installing customized manufacturing equipment. On February 1, 2018, it signs a contract to design a fully automated wristwatch assembly line for $2 million, which willbe settled in cash upon completion of construction. Precision Equipment will install the equipment on the client’sproperty, furnish it with a customized software package that is integral to operations, and provide consulting services that integrate the equipment with Precision’s other assembly lines. How many performance obligations existin this contract?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 7P: Self-Construction Olson Machine Company manufactures small and large milling machines. Selling...
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Precision Equipment, Inc., specializes in designing and installing customized manufacturing equipment. On February 1, 2018, it signs a contract to design a fully automated wristwatch assembly line for $2 million, which will
be settled in cash upon completion of construction. Precision Equipment will install the equipment on the client’s
property, furnish it with a customized software package that is integral to operations, and provide consulting services that integrate the equipment with Precision’s other assembly lines. How many performance obligations exist
in this contract?
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