Pagit Inc, a software development company, enters into a contract with Plato Company to provide computer and hosting services. Pagit will provide a hosted accounting software system that requires Plato to purchase hardware from Pagit. Plato also purchases other computing services from Pagit to migrate historical data and create interfaces with its other existing management systems. Pagit delivers the hardware first, followed by other computing services, and finally the online hosting services.
Required
a. Determine the performance obligations if Pagit commonly sells goods and services separately or as a package.
b. Determine the performance obligations if Pagit never sells the hardware separately, but rather always bundles it with hosting services. It does commonly sell the other goods and services separately.