On December 1, 20x4, ABC Co enters into a contract to deliver 10 cars to XYZ company which is to be used by XYZ for their business. The contract specifically states the XYZ can at any time cancel the contract and return the cars they already received from ABC if ABC has not yet delivered at least 6 cars. The cost of 1 vehicle is P800,000 which ABC sells for P1,000,000. ABC was able to deliver 4 cars in 20x4 and the remaining 6 cars in 20x5. How much revenue is to be recognized by ABC in 20x5? [A] 6,800,000 [B] 6,000,000 [C] 2.000,000 [D] 1,200,000
On December 1, 20x4, ABC Co enters into a contract to deliver 10 cars to XYZ company which is to be used by XYZ for their business. The contract specifically states the XYZ can at any time cancel the contract and return the cars they already received from ABC if ABC has not yet delivered at least 6 cars. The cost of 1 vehicle is P800,000 which ABC sells for P1,000,000. ABC was able to deliver 4 cars in 20x4 and the remaining 6 cars in 20x5. How much revenue is to be recognized by ABC in 20x5? [A] 6,800,000 [B] 6,000,000 [C] 2.000,000 [D] 1,200,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 1, 20x4, ABC Co enters into a contract to deliver 10 cars to XYZ company which is to be used by XYZ for their business. The contract specifically states the XYZ can at any time cancel the contract and return the cars they already received from ABC if ABC has not yet delivered at least 6 cars. The cost of 1 vehicle is P800,000 which ABC sells for P1,000,000. ABC was able to deliver 4 cars in 20x4 and the remaining 6 cars in 20x5. How much revenue is to be recognized by ABC in 20x5?
[A] 6,800,000
[B] 6,000,000
[C] 2.000,000
[D] 1,200,000
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