Green- Up Inc. contracts with a building manager to provide goods and services to enhance the… 1 answer below »

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Green- Up Inc. contracts with a building manager to provide goods and services to enhance the… 1 answer below »

Green- Up Inc. contracts with a building manager to provide goods and services to enhance the energy efficiency. It offers consulting services, including recommending ways to increase energy efficiency and monitor performance. It also provides items such as thermostats and automatic light switches as part of the contract. Green- Up charges 60% of the reduction in energy usage during the first year as a consulting fee. Green- Up determines that the consulting services comprise one performance obligation and the items provided are another performance obligation. The estimated standalone selling prices are $ 180,000 for the consulting services and $ 100,000 for the items to increase energy efficiency. The stated price in the contract for the items provided is a fixed payment of $ 60,000. The price stated for the consulting fees is 60% of the customer’s reduction in future energy costs. Green- Up estimates that the customer will reduce its energy usage by $ 500,000. The customer’s actual energy reduction is $ 550,000. What amount of the transaction price should Green- Up allocate to each performance obligation?

 

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Green- Up Inc. contracts with a building manager to provide goods and services to enhance the… 1 answer below » was first posted on July 2, 2020 at 12:56 am.
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