1. Muleshoe Inc. signed a contract provide crop moisture monitoring systems to Farewell Farms on April 1, 2015. The contract required Muleshoe to install 10 units of moisture measuring hardware at a Farewell pecan orchard on June 1, 2015, 30 units of hardware at a Farewell cotton field on August 1, 2015, and another 40 units of hardware at a Farewell guar farm on October 1, 2015. Monitoring and servicing of these units will be provided by an unrelated third party. The units can be used from the moment they are installed. The contract required one payment of $200,000 by Farewell on April 1, 2015. The estimated fair value of each unit was $3,000. Assume that the monitoring and servicing of all installed units was now included in the contract (and that the total contract price remained at $200,000). Monitoring and servicing would continue until December 31, 2016. How would this change affect the amount of revenue recognized by August 1, 2015?

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a. The change would increase the amount of revenue recognized by August 1, 2015.

b. The change would decrease the amount of revenue recognized by August 1, 2015.

c. The change would not affect the revenue recognized by August 1, 2015.

d. The effect of the change cannot be determined from the information given.

2.