Stellar, Inc. is a distributor of prepaid telephone cards to customers in its convenience stores. When Stellar sells the cards, it then pays the telecommunications company, TeleExpress, less a commission of 20 percent of the selling price to customers. Stellar receives $3,800 in cards in January 2020. Stellar sold 55% of the cards in February, 30% in March, and 15% in April. It costs TeleExpress $2,900 to provide the telephone service on the cards sold by Stellar. Indicate how much income Stellar should recognize in January, February, March, and April.
Stellar, Inc. is a distributor of prepaid telephone cards to customers in its convenience stores. When Stellar sells the cards, it then pays the telecommunications company, TeleExpress, less a commission of 20 percent of the selling price to customers. Stellar receives $3,800 in cards in January 2020. Stellar sold 55% of the cards in February, 30% in March, and 15% in April. It costs TeleExpress $2,900 to provide the telephone service on the cards sold by Stellar. Indicate how much income Stellar should recognize in January, February, March, and April.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6MC
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Stellar, Inc. is a distributor of prepaid telephone cards to customers in its convenience stores. When Stellar sells the cards, it then pays the telecommunications company, TeleExpress, less a commission of 20 percent of the selling price to customers.
Stellar receives $3,800 in cards in January 2020.
Stellar sold 55% of the cards in February, 30% in March, and 15% in April.
It costs TeleExpress $2,900 to provide the telephone service on the cards sold by Stellar.
Indicate how much income Stellar should recognize in January, February, March, and April.
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