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1. AB sells computer equipment with a two-year service agreement for a total of $3,000 on 1 October 2014. The cost of providing the service

1. AB sells computer equipment with a two-year service agreement for a total of $3,000 on 1 October 2014. The cost of providing the service guarantee is $200 per annum and AB usually charges a 25% mark-up on cost when selling the service separately. How much revenue should be recognised in the financial statements for the year ended 31 March 2015? A. $2,500 B. $2,625 C. $2,750 D. $3,000

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