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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Sanderson Construction Company provides a variety of construction services, ranging from general contracting services to specialized subcontracting services (e.g., electrical, plumbing services). Sanderson entered into a contract to construct a building for a customer. The contract identifies Sanderson as responsible for site preparation and all aspects of construction, including laying the foundation, framing, interior “rough- in” (e.g., plumbing, electrical, drywall), and exterior and interior finishing.

Required:

Identify Sanderson’s performance obligations.

To determine

Identify the performance obligations of Company S.

Explanation

Single performance obligation: In single performance obligation, the transaction price is associated to the performance obligation and no allocation is needed.

  • Company S is having a single performance obligation that is “The completion of the building”...

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