3. [SOP 97-2, Software Revenue Recognition Criteria: 2001 AICPA Technical Practice Aids adapted] Jasmine Inc., a soft-ware vendor, delivers its product to a customer on January 30, 2001 pursuant to a licensing arrangement that permits the cus- tomer to use the software indefinitely. The contract calls for pay- ment of $600,000 in 30 days and $400.000 due in 13 months.

a. Calculate the amount of revenue that Jasmine can recognize during cach of the following periods. Justify each calculation. (i) The fiscal year ending January 31, 2001. (ii) The fiscal years ending January 31, 2002 and January 31.2003. (iii) The fiscal year ending January 31, 2001 if the licensing period begins on March 1, 2001.

b. Assuming that Jasmine is not involved with its customers' fi- nancing arrangements, explain how your answers to part a would change if the customer paid in advance of the sched- uled payments.

c. Explain whether Jasmine's ability to recognize revenue would change if, on January 30, 2001, it transfers, without re- course, the rights to receive all payments to an unrelated third party.

d. Assuming that Jasmine participates in a customer's financing arrangements with an unrelated party and receives payments in advance of the contractual terms, (i) Explain whether Jasmine can recognize revenue on re- ceipt of payment. (ii) Describe the income statement and balance sheet impact of the payments received