A.S.A.P.PLEASEEE For Questions 11-16Oyeman and Tipay Co. (OTC), a private entity, enters into a service concession arrangement. The termsof the agreement require OTC to:Construct an underground railway system – completing construction within two years;Maintain and operate the railway for 8 years after the completion;Recondition the railway at the end of the 9th year; andTurnover the railway to the government at the end of the 10th year.As consideration, the government pays the operator P80M per year in Years 3 to 10. OTC makes thefollowing estimates at contract inception:YearContract costsStand-alone selling priceConstruction services150Forecast cost + 20%250Forecast cost + 20%Operation services3-1020Forecast cost + 40% Reconditioning10Forecast cost + 10%All cash flows are assumed to take place at the end of the year. OTC determines that the implied interestrate in the contract is 33.05%.11. How many performance obligations are there in the contract?a.oneb. twothreed. fourC.12. What is the nature of the consideration in the contract?a. financial assetb. intangible assetpartly financial asset and partly intangible assetd.C.property, plant and equipment13. How much service revenue is recognized in Year 2?а.60b.80С.28d. 0

11. How many performance obligations are there in the contract? a. one b. two C. three d. four 12. What is the nature of the consideration in the contract? a. financial asset b. intangible asset c. partly financial asset and partly intangible asset d. property, plant and equipment 13. How much service revenue is recognized in Year 2? а. 60 b. 80 С. 28 d. 0

11. How many performance obligations are there in the contract? a. one b. two C. three d. four 12. What is the nature of the consideration in the contract? a. financial asset b. intangible asset c. partly financial asset and partly intangible asset d. property, plant and equipment 13. How much service revenue is recognized in Year 2? а. 60 b. 80 С. 28 d. 0

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.2SB

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