1) Complete Electronics Inc. sells a point-of sale computer with a two-year service contract. Complete collects $ 3000 cash for the selling price of the computer and $ 552 for the two-year service contract. How is revenue recognized?

A.Complete will record Sales Revenue of $ 1,776 per year for two years.

B.Complete will record Sales Revenue of $ 3,000 when the computer is delivered and Service Revenue of $ 23per month for 24 months.

C.Complete will record Sales Revenue of $ 3000 when the computer is delivered and will record revenue for the service contract as service calls are made.

D.Complete will record Sales Revenue of $ 3,552 when the computer is delivered to the customer.

2) Complete Electronics Inc. sells a point-of-sale computer with a two-year service contract. Complete collects $ 1000 cash for the selling price of the computer and $ 552 for the two-year service contract. How is revenue recognized?

A.Complete will record Sales Revenue of$ 1000 when the computer is delivered and Service Revenue of $ 23per month for 24 months.

B.Complete will record Sales Revenue of $ 1000 when the computer is delivered and will record revenue for the service contract as service calls are made.

C.Complete will record Sales Revenue of $ 1552 when the computer is delivered to the customer.

D.Complete will record Sales Revenue of $ 776 per year for two years.