Ortiz& Co. signed a contract on January 15, 2021 to provide Cake Factory with an...
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Ortiz& Co. signed a contract on January 15, 2021 to provide Cake Factory with an ingredient-weighing system for a price of $150,000. The system included finely tuned scales that fit into Patrona's automated line, Plutarco proprietary software modified to allow the weighing system to function in Patrona's automated system, and a two-year contract to calibrate the equipment and software on an as-needed basis. If Plutarco was to provide these goods or services separately, it would charge $120,000 for the scales, $20,000 for the software, and $30,000 for the calibration contract. Plutarco Company delivered and installed the equipment and software on February 1, 2021, and the calibration service commenced on that date. Assume that the scales, software and calibration service are all separate performance obligations.
How much revenue will Plutarco recognize in 2021 for this contract?
Record in General Journal form the above transactions and required adjusting entry at December 31, 2021.
Assume that the scales, software and calibration service are viewed as one performance obligation. How much revenue will Plutarco recognize in 2021 for this contract?
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