Question: Assume the following scenarios Scenario 1 During 2015 IBM provides

Assume the following scenarios.
Scenario 1: During 2015, IBM provides consulting services on its mainframe computer for $11,000 on account. The customer does not pay for those services until 2016.
Scenario 2: On January 1, 2015, 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 2015, 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 2015.
Scenario 4: During 2015, Goodyear sells tires to customers on account for $35,000. By the end of the year, collections total $30,000. At the end of 2016, it becomes apparent that the remaining $5,000 will never be collected from customers.

For each scenario, calculate the amount of revenue to be recognized in 2015.

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  • CreatedJuly 15, 2014
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