In 20X1, Ginzel Corporation agreed to provide a client with 20 detailed marketing analyses of its client’s key products for a total fee of $110,000. The fee was computed as $5,000 per report × 20 reports = $100,000, plus $10,000 to extract the necessary data from the client’s system and convert it into the format Ginzel needs to do the analysis. It cost Ginzel $4,000 to complete the data extraction and conversion.

As of December 31, 20X1, Ginzel has completed the conversion of the data and has completed and delivered 7 of the 20 marketing reports to the client.

Required:

1. How much revenue should Ginzel recognize in 20X1?

2. How should Ginzel account for the $4,000 in costs it incurred to extract and convert the client’s data?