Brief Exercise 18-8

Presented below are three revenue recognition situations.

(a)Groupo sells goods to MTN for $905,000, payment due at delivery.(b)Groupo sells goods on account to Grifols for $790,000, payment due in 30 days.(c)Groupo sells goods to Magnus for $537,000, payment due in two installments, the first installment payable in 18 months and the second payment due 6 months later. The present value of the future payments is $503,800.

Indicate the transaction price for each of these situations and when revenue will be recognized.

Transaction Price: For A B C

Revenue will be recognized

A:

At the point of sale

At delivery

B:

At the point of sale

At the time of payment

C:

At the point of sale

At the time of payment