Required: Answer each case separately for each of the cases answer the following questions, do not combine answers or cases:

1. determine when the seller should recognize revenue and expense, and where it would be on the income statement

2. Explain your answer using GAAP revenue recognition guidelines.

3. Explain how each transaction would appear on the balance sheet for 2020.

Case 3-Your company sells a product bundle that includes software and a 3 year service contract for $100,000, The company installed the software on July 1, 2020, and the client paid $50,000 cash. The balance is due on December 31, 2020. What if:

(a) the performance obligations are interdependent and cannot be separated out or sold separately.

(b) the performance obligations are not interdependent ( The service contract is sold separately for $25,000 and the software for $100,000.)