Question

Topics. Stepono Puronice OL The next day, the same student goes into the Coffee House bringing in his coffee mug and orders a large coffee and a croissant. Standalone selling prices are $5 for the coffee and $2 for the croissant. The cashier tells the student they are out of croissants. The cashier then offers the student the large coffee and a coupon for two croissants (its typical business practice) for $7. The student pays the $7 to the cashier. The cashier gives the student a coupon for two croissants. The barista pours the coffee into the coffee mug and hands it to the student. The student then takes the coffee and the coupon and heads to the dorm to study for the upcoming accounting exam. The Coffee House sells a coupon for two croissants for $3.50. To increase visits, these coupons can be redeemed any date after the date of purchase. The Coffee House has limited experience with these coupons but, so far, these coupons have always been redeemed. How many performance obligations are there in this transaction? C 3 performance obligations--the coffee, the first croissant, and the second croissant C 4 performance obligations-the coffee, the mug, the first croissant, and the second croissant C 2 performance obligations-the coffee and the coupon for two croissants C 3 performance obligations-the coffee, the mug, and the coupon for the croissants

Need to know the performance obligations

First Part of Question

Answer 1

Part 1

2 performance obligations--the coffee and the coffee  mug

Approval and commitment - The Coffee House has a right to payment for the Coffee and the mug.

identification of the rights - The student has the legal right to the coffee and the mug and the student has accepted the coffee and the mug.

Part 2

2 performance obligations--the coffee and the coupon for two croissants

Approval and commitment - The student makes a commitment to purchase the coffee and a coupon for two croissants. The Coffee House approves selling the coffee and a coupon fortwo croissants.

Identification of the rights of the parties – The student has a right to the coffee and the coupon for two croissants and the Coffee House has a right to payment.