On 2 November 2021, Kitset Garages Ltd signed a contract to deliver and build a new garage to Jenny Letterson for $63,000. The contract includes three performance obligations:
The garage’s materials, which is normally priced at $35,000.
The garage’s foundation, which is normally priced at $21,000.
Building the garage, which is normally priced at $14,000.
Kitset Garages Ltd will deliver and build the garage to Jenny Letterson by 19 November 2021, and payment is due within 10 business days of this date.
Ignore GST.
Required:
Prepare a table that allocates the transaction price to the performance obligations.
Use the answer template below
Kitset Garages Ltd’s Table to Allocate the Contract Price to Performance Obligations:
Performance Obligations
Stand-Alone Price
Allocation
$
%
$
Garage’s materials
Garage’s foundation
Building of the garage
TOTAL
