Each of the following is an independent situation that relates to the recognition of revenue:
a. Collection of a fare by an airline when the passenger makes a reservation
b. Receipt of payment for delivery services prior to the delivery of the goods
c. Sale of an annual pass to a theme park
d. Construction of a home in a subdivision prior to a buyer being identified e. Payment of insurance coverage at the beginning of the coverage period
Required:
For each situation, indicate if the company should recognize revenue over time or at a point in time. Also, indicate the company’s performance obligation and be as specific as possible as to the time period it is satisfied.