1. A college student walks into a Coffee House on campus and orders a large cup of black coffee and a croissant for $7. The stand alone prices are $5 for coffee and $2 for the croissant. The coffee shop is out of croissants so they give the student a coupon to get 2 croissants at a later date. The coffee shop sells coupons for two croissants for $3.50 each. The coupons are good for 3 months. What amount of revenue is recognized when the coffee is delivered?

Select one:

a. $5

b. $4.50

c. $4.12

d. $7

2. ABC Company sells inventory to XYZ Company for $2,400. If XYZ purchases additional inventory it will trigger a 10% discount on the purchase. Based on past experience, the probability of ABC meeting the criteria for a volume discount is 55%. Indicate the 2 appropriate transaction prices.

Select one or more:

a. $2,400

b. $2,268

c. $2,160

d. $1,186

e. $1,080

3. Wise Guy Company is working on a creative project with the following characteristics: (1) the customer does not receive the benefit as the work performed, (2) the asset is not controlled by the customer, and (3) the asset does have other uses to the seller. About 40% of the $100,000 project is completed in Year 1 and 60% is completed in Year 2. What amount of revenue should be recognized in Year 1 and Year 2, respectively?

Select one:

a. $100,000 in Year 1 and $0 in Year 2.

b. $0 in Year 1 and $100,000 in Year 2.

c. $40,000 in Year 1 and $60,000 in Year 2.