Mckinsey Industries sells specialized mountain bikes. Each specialized bike purchased includes free maintenance service for 12 months. The price of the specialized bike is $700. When sold separately, a maintenance contract is $200 and a comparable but non-specialized bike is $600. What amount of revenue will Mckinsey recognize at the date of sale for each bike?

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Situation 1 when the sale price is 700 then the sale amount will be recognized as 700 ... View the full answer