Big Joes Super Cars, Present Value (Revised Revenue Guidance) Big Joes Super Cars has just sold a

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Big Joe’s Super Cars, Present Value (Revised Revenue Guidance) Big Joe’s Super Cars has just sold a luxury car to customer Tim. The purchase contract establishes a base price of $60,000, plus a contractual interest rate of 4%, payable in 60 monthly installments of $1,105. Control of the car transferred to Tim when Tim signed the contract and drove off the lot. If Tim had obtained separate financing (say, a bank loan) for the purchase of the car, his interest rate would have been 6%.

1.What amount of revenue should Big Joe’s record at the date of sale? What guidance should Big Joe’s apply to the subsequent measurement of its receivable?

2.Reflect upon what measurement attribute is being used to record Big Joe’s revenues.