A company recognizes revenue over time for a service contract totaling $120,000. At the end of the first year, 50% of the contract is completed. Calculate the revenue recognized and accounts receivable balance if the company bills customers annually. Discuss the importance of accurate revenue recognition and aging of receivables. Analyze the potential impact of changes in revenue recognition standards on the company’s financial reporting. Consider the implications of extended payment terms and delayed collections on the company’s cash flow and liquidity. How can the company strategically manage its revenue recognition and accounts receivable processes to ensure accurate financial reporting and effective cash flow management? Discuss the role of credit policies and collection strategies in maintaining healthy receivables turnover and minimizing bad debt risks.