ABC Corp supplies laptops to large businesses. On July 1, 2018, ABC Corp entered into a contract with XYZ Co., under which XYZ Co, was to purchase laptops at P10,000 per unit. The contract states that if XYZ Co purchases more than 500 units in a year, the price per unit is reduced respectively to P9,000 per unit. ABC Corp's year end is June 30.

a.As at Sept. 30, 2018, XYZ Co had bought 70 laptops from ABC Corp. The latter estimated that XYZ Co purchases would not exceed 500 in the year to June 30, 2019 and XYZ Co would therefore not be entitled to the volume discount.

b.During the quarter ended Dec. 31, 2018, XYZ Co expanded rapidly as a result of a substantial acquisition, and purchased an additional 250 laptops from ABC Corp. ABC Corp then estimated that XYZ Co's purchases would exceed the threshold for the volume discount in the year to June 30, 2019.

Required: Calculate the revenue ABC Corp would recognize in:

a. Quarter ended Sept. 30, 2018;

b. Quarter ended Dec. 31, 2018

Answer rating: 100% (QA)

To calculate the revenue ABC Corp would recognize in each quarter we need to determi... View the full answer