Chapter 5, Problem 5.1BP

Calculate the amount of revenue to recognize (LO5–1)

Assume the following scenarios.

    Scenario 1:    During 2018, The Hubbard Group provides services of $900,000 for repair of a state highway. The company receives an initial payment of $300,000 with the balance to be received the following year.

    Scenario 2:    Rolling Stone magazine typically charges $80 for a one-year subscription. On January 1, 2018, Herman, age 72, purchases a one-year subscription to the magazine and receives a 15% senior citizen discount.

    Scenario 3:    During 2018, Waste Management provides services on account for $30,000. The customer pays for those services in 2019.

Scenario 4:    During 2018, Sysco Corporation sells grocery items to one of its customers for $260,000 on account. Cash collections on those sales are $180,000 in 2018 and $60,000 in 2019. The remaining $20,000 is written off as uncollectible in 2019.

Required:

For each scenario, calculate the amount of revenue to be recognized in 2018.