1. A service company prepares a budget: Sales revenue $1,000,000, variable costs $400,000, fixed costs $300,000, expected cash collections $900,000.
   • Requirements:
     • Apply the revenue recognition principle to determine when revenue should be recognized for service sales.
     • Calculate the budgeted contribution margin and net income.
     • Prepare a budgeted income statement with revenue recognition considerations.
     • Recommend budgeting strategies that align with revenue recognition timelines.
     • Analyze the impact of revenue recognition on budgeting accuracy and financial forecasting.