Question

In: Accounting

Swanson Corporation provides low-cost food delivery services to senior citizens. At the end of the year on December 31, 2024, the company reports the following amounts:

Assume the following scenarios.

Scenario 1: During 2024, IBM provides consulting services on its mainframe computer for $11,000 on account. The customer does not pay for those services until 2025.

Scenario 2: On January 1, 2024, Gold’s Gym sells a one-year membership for $1,200 cash. Normally, this type of membership would cost $1,600, but the company is offering a 25% “New Year’s Resolution” discount.

Scenario 3: During 2024, The Manitowoc Company provides shipbuilding services to the U.S. Navy for $450,000. The U.S. Navy will pay $150,000 at the end of each year for the next three years, beginning in 2024.

Scenario 4: During 2024, Goodyear sells tires to customers on account for $35,000. By the end of the year, collections total $30,000. At the end of 2025, it becomes apparent that the remaining $5,000 will never be collected from customers.

Required:

For each scenario, calculate the amount of revenue to be recognized in 2024.


 Revenue recognized in 2024
Scenario 1
Scenario 2
Scenario 3
Scenario 4

Solutions

Expert Solution

Problem 5-1A (Static) Calculate the amount of revenue to recognize (LO5-1)

 

Required:

  Revenue recognized in 2024
Scenario 1 $ 11,000
Scenario 2 $ 1,200
Scenario 3 $ 450,000
Scenario 4 $ 35,000
Explanation:

 

 

devender singh answered 2 years ago
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