Surfside Ltd is marketing a surfing bundle in which, for $1100, it provides customers with a surfboard (which retails separately for $850), a wetsuit (which retails separately for $250), and five lessons (which retail for $200). You are required to determine: Whether separate performance obligations exist, and to explain why you made this judgement. How much of the transaction price to allocate to each performance obligation?
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Surfside Ltd is marketing a surfing bundle in which, for $1100, it provides customers with a surfboard (which retails separately for $850), a wetsuit (which retails separately for $250), and five lessons (which retail for $200). You are required to determine:
- Whether separate performance obligations exist, and to explain why you made this judgement.
- How much of the transaction price to allocate to each performance obligation?
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- ABC Ltd is marketing a ‘surfing bundle’ in which, for $3200, it provides customers with a surfboard (which retails separately for $2550), a wetsuit (which retails separately for $750) and five lessons (which retail separately for $600). You are required to determine: How much of the transaction price to allocate to each performance obligation?ABC Ltd is marketing a ‘surfing bundle’ in which, for $2200, it provides customers with a surfboard (which retails separately for $1700), a wetsuit (which retails separately for $500) and five lessons (which retail separately for $400). You are required to determine: Whether separate performance obligations exist, and to explain why you made this judgement.Pacifica Fitness Ltd is marketing a 'fitness package' in which, for $440, it provides customers with a 6-month gym membership (which retails separately for $500, a gym bag (which retails separately for $35) and five free zumba classes (which retail separately for 65). You are required to determine: a) Separate performance obligations and how much of the transaction price to allocate to each performance obligation.
- Genius Ltd is a computers and software developer that enters into a contract with a customer to sell 12 computers for £600 each. In the contract the customer has required Genius Ltd to transfer the specific software license, perform the installation, and provide a software update and technical support for a two-year period for a price of £20,000. The company usually sells the software license, the installation service, the software update and the technical support separately to customers at the respective prices of £8,000, £4,000, £4,000 and £4,000. The customer requires a specific installation service that includes some specific functions to enable the software to interface with other customized software application. After the delivery of the first 6 computers, the contract is modified and the customer required the delivery of an additional 8 computers (for a total of 20 computers). The price of the additional computer is £490 which is the stand alone price of the additional products.…Pacifica Fitness Ltd Is Marketing A 'Fitness Package' In Which, For $400, It Provides Customers With A 6-Month Gym Membership (Which Retails Separately For $530, A Gym Bag (Which Retails Separately For $32) And Five Free Zumba Classes (Which Retail Separately For 69). You Are Required To Determine: (10 Marks) A) Separate Performance Obligations And How Much Pacifica Fitness Ltd is marketing a 'fitness package' in which, for $400, it provides customers with a 6-month gym membership (which retails separately for $530, a gym bag (which retails separately for $32) and five free zumba classes (which retail separately for 69). You are required to determine: a) Separate performance obligations and how much of the transaction price to allocate to each performance obligation. Good or Service Stand-alone Price Discount Allocation Allocated Amount Total b) Pacifica Fitness Ltd sold 19 packages advance and receive first payment on 30 May 2023.…Leo Consulting enters into a contract with Highgate University to restructure Highgate’s processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $66,000 and earn an additional $13,000 if Highgate achieves $130,000 of cost savings. Leo estimates a 70% chance that Highgate will achieve $130,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract? Transaction price for the contract ?
- Leo Consulting enters into a contract with Highgate University to restructure Highgate’s processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $25,000 and earn an additional $10,000 if Highgate achieves $100,000 of cost savings. Leo estimates a 50% chance that Highgate will achieve $100,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract?VolleyElite runs a volleyball program consisting of camps, tournaments, and specialized coaching. VolleyElite charges customers 500 per year for access to its facilities and programs. In addition, VolleyElite charges each customer a 100 registration fee. The fee is not refundable and must be paid at the initiation of the contract. Should the registration fee be considered a separate performance obligation from the yearly dues?Luke consulting enters into a contract with Holand University to restructure Holand's process for purchasing goods from suppliers. The contract states that Luke will earn a fixed fee of P25,000and earn an additional P10,000 if Holand achieves P10,000 of cost savings. Luke determines the transaction price as the expected value of expected consideration, what transsaction price will Luke estimate for this contract?
- O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complimentary club-fitting services. A full set of clubs with the fitting services sells for $1,500. Similar club-fitting services are offered by other vendors for $110, and O’Hara generally charges approximately 10% more than do other vendors for similar services. Assuming that the golf clubs and the club-fitting services are separate performance obligations, estimate the stand-alone selling price of the club-fitting services using the adjusted market assessment approach.Inventors sells two of its patents in a contract with a retailer that sells toys and other children's products. The first is a patent for a super absorbent diaper and the second is a patent for a new digital toy. Palm determines that each of these patents comprises a separate performance obligation. The estimated standalone selling prices are $7 million for the diaper patent and $2 million for the digital toy patent. The stated price in the contract for the diaper patent is a fixed payment of $3.3 million. The price stated for the digital toy patent is 10% of the customer's future sales of the toys. Palm estimates the variable consideration for this patent as $3.7 million. During the current year, the customer has sales related to the toy patent of $20.0 million, resulting in a $2 million payment to Palm inventors and a total consideration of $5.3 million. What amount of the transaction price should Palm allocate to each performance obligation? Patent Standalone…Beaumont Company enters into a contract to provide a high quality diving-certification preparation package, including goggles, snorkels, air tanks, fins, a wetsuit, and 5 private lessons to get ready for diving certifications. The entire package sells for $2,500. Other competing sellers in the same region charge an average of $250 for a set of goggles and $750 for the lessons, if sold separately. Beaumont Company usually sells at a 5% discount compared to other shops, since it is a bit farther away from the ocean. Required: What would be Beaumont’s stand-alone selling price of the goggles and the lessons, based on adjusted market assessment approach? Show computations.