On March 1, 2018, Gold Examiner receives $154,000 from a local bank and promises to deliver 95 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink's, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,520 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $80 per unit. Brink's picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1 Required 1. How many performance obligations are in this contract? 2. to 4. Prepare the journal entry Gold Examiner would record on March 1, March 30 and April 1 Complete this question by entering your answers in the tabs below Req 1 Req 2 to 4 Prepare the journal entry Gold Examiner would record on March 1, March 30 and April 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Two performance

2. Journal entries

Explanation:

1. Delivery of Gold Bars and Insurance are the two performance obligations in this contract.

2.  The Journal Entry is shown below:-

1. Cash Dr,                                                $154,000

     To Deferred revenue - Gold bars                 $146,300

     To Deferred revenue - Insurance                   $7,700

(Being cash is received)

2. Deferred revenue - Gold bars             $146,300

      To Sales revenue                                            $146,300

(Being Sales revenue is recorded)

3. Deferred revenue - Insurance              $7,700

       To Service revenue                                     $7,700

(Being service revenue is recorded)

Total Standalone Prices = Value of Gold Bars + Standalone Selling Price of Insurance

= ($1,520 × 95) + ($80 × 95)

= $144,400 + $7,600

= $152,000

Each Performance Obligation Share:

Gold Bars = $144,400 ÷ $152,000 × 100

= 95%

Insurance Services = $7,600 ÷ $152,000 × 100

= 5%

Allocation of Total Selling price on the basis of Standalone Selling Prices

Gold Bars = $154,000 × 95%

= $146,300

Insurance Services = $154,000 × 5%

= $7,700

correct, but each time you dont pay the price of the penalty can increase.

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