Posted: February 26th, 2023

SATISFACTION OF PERFORMANCE OBLIGATIONS

 Assume McDonald’s enters into a contract to sell Billy Bear dolls for Toys4U Stores.  Based on the contract, McDonald’s displays the dolls in selected stores.  Toys4U is not paid until the dolls have been sold by McDonald’s, and unsold dolls are returned to Toys4U. 

Required:

• Has Toy4U satisfied its performance obligation when it delivers the dolls to McDonald’s?  Explain your answer.