On June 1, 2021, Aurora Inc. sold 100 unit of its products for $120 each to Dos Inc.. Aurora Inc. allows Dos Inc. to return any unused product within 2 months from the date of purchase and receive a full refund. The cost of each product is $ 72. Aurora Inc. estimated that, within 2 months from the date of purchase, there is a 75% chance that 25 units will be returned, a 15% chance that 20 units will be returned, a 5 % chance that 12 units will be returned, and a 5% chance that no returns will be made. The returned products are expected to be resold at a profit. 

How much revenue should Aurora Inc. recognize at time of sale? Aurora Inc. follows IFRS and uses the expected value method.

Answer rating: 100% (QA)

The International Financial Reporting Standards IFRF allow for the recognition of revenue when or a... View the full answer