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1. On January 1, 2015, XYZ's Fair Value of Pension Fund was $200,000. During 2015, XYZ contributed $50,000 of assets into the fund. During 2015,

1. On January 1, 2015, XYZ's Fair Value of Pension Fund was $200,000. During 2015, XYZ contributed $50,000 of assets into the fund. During 2015, XYZ paid out retirement benefits of $45,000. Also, during 2015, the actual return on the pension fund was a loss of $5,000 when the expected return was a gain of $6,000.

What was XYZ's Fair Value of pension fund balance at December 31, 2015?

2

A landscaper usually charges $100 to cut a homeowner's lot. While driving through a neighborhood, he notices a yard that needs cutting. He cuts the lawn without the homeowner's permission. After he cuts the lawn, he goes to the door and tells the homeowner that he cut the homeowner's lawn and asks for the customary $100. At first, the homeowner yells at the landscaper for cutting his lawn and refuses to pay a dime. But after a friendly discussion, the homeowner and landscaper agree to a fee of $80 and the homeowner pays the $80. Which statement is true?

a

The landscaper should recognize revenue of $100 as this is what he usually earns when cutting lots.

b

The landscaper should not recognize any revenue because a contract did not exist before he cut the grass.

c

The landscaper should not recognize any revenue because a contract never existed.

d

The landscaper should recognize revenue of $80,000 because that is what the contract indicated.

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