Ziffel McSporran is a provider of de-icing goods and services for Fern Tree, a suburb of Hobart that often has its roads blocked by snow in the winter. Customers may choose to purchase a high-tech, solar augmented electric snow shovel for $480.00. They may also choose to subscribe to a snow cleaning service which costs $800.00 and covers the months of June to September inclusive. However, as having snow shovels on location can make McSporran's service more efficient, he also provides a combined 'new customer' package whereby a customer obtains the snow shovel together with a 4-month service for the first year for the total package price of $960.00. McSporran's financial year ends on 30th June.

Required:
1. Identify the performance obligations. For each obligations, specify whether it is satisfied at point in time (if so, which) or over a period of time (if so, which).
2. If a customer purchases the combined package for cash on 1st of June, show the journal entry which McSporran would record. Ignore any cost of goods sold for the snow shovel.
3. Following from part 2 what adjusting entry would be necessary on the 30th of June?

Answer rating: 100% (QA)

1 The performance obligations are as follows Purchasing a hightech solar augmented electric snow sho... View the full answer