Cornerstone Exercise 3-14 (Algorithmic) Revenue Recognition Principle

Heartstrings Gift Shoppe sells an assortment of gifts for any occasion. During October, Heartstrings started a Gift-of-the-Month program. Under the terms of this program, beginning in the month of the sale, Heartstrings would select and deliver a random gift each month, over the next 12 months, to the person the customer selects as a recipient. During October, Heartstrings sold 31 of these packages for a total of $10,476 in cash.

Required:

For the month of October, calculate the amount of revenue that Heartstrings will recognize. $