DGA Associates, Inc

question 25

Essay

DGA Associates, Inc. sells computer workstations designed for architects. In 2018, it sold 120 workstations for $360,000. For each workstation sold, DGA distributed a 40% discount coupon for any additional future purchases made in the next 12 months. Based on historical experience, DGA expects that approximately 30% of the coupons will be utilized, and the goods purchased with the coupons would normally sell for $350.
Required:
(a) How many performance obligations are in a contract to purchase a computer workstation? Explain the reasons for your answer.
(b) Prepare a journal entry to record revenue for the sale of 120 computer workstations, assuming that DGA uses the residual method to estimate the stand-alone selling price of the workstations sold without the discount coupon.

---

Definitions:

Schooled Peers

Individuals, typically children or adolescents, who attend formal educational institutions and share similar educational experiences.

Formal Schooling

Structured educational programs and curricula provided by educational institutions, following standardized guidelines.

Logical Thinking

The process of reasoning consistently and systematically to come to a conclusion based on evidence and sound principles.

Unschooled Peers

Individuals, typically children or adolescents, who acquire their education and socialization outside of formal school settings.