Vroom Vacuums sells the Tornado vacuum cleaner. Each Tornado has a one-year warranty that covers any product defects. When customers purchase a Tornado, they also have the option to purchase an extended three-year warranty that covers any breakage or maintenance. The extended warranty sells for the same amount regardless of whether it is purchased at the same time as the Tornado or at some other time. How many performance obligations exist in the implied contract for the purchase of a vacuum cleaner? Identify the best description of each performance obligation from the following list. (You may select more than one answer.) Delivery of vacuum cleaner The one-year quality-assurance warranty The option to purchase the three-year extended warranty Purchase of vacuum cleaner
Vroom Vacuums sells the Tornado vacuum cleaner. Each Tornado has a one-year warranty that covers any product defects. When customers purchase a Tornado, they also have the option to purchase an extended three-year warranty that covers any breakage or maintenance. The extended warranty sells for the same amount regardless of whether it is purchased at the same time as the Tornado or at some other time. How many performance obligations exist in the implied contract for the purchase of a vacuum cleaner? Identify the best description of each performance obligation from the following list. (You may select more than one answer.) Delivery of vacuum cleaner The one-year quality-assurance warranty The option to purchase the three-year extended warranty Purchase of vacuum cleaner
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
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 10RE
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Vroom Vacuums sells the Tornado vacuum cleaner. Each Tornado has a one-year warranty that covers any product defects. When customers purchase a Tornado, they also have the option to purchase an extended three-year warranty that covers any breakage or maintenance. The extended warranty sells for the same amount regardless of whether it is purchased at the same time as the Tornado or at some other time.
How many performance obligations exist in the implied contract for the purchase of a vacuum cleaner?
Identify the best description of each performance obligation from the following list. (You may select more than one answer.)
- Delivery of vacuum cleaner
- The one-year quality-assurance warranty
- The option to purchase the three-year extended warranty
- Purchase of vacuum cleaner
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