B.

Solve in Excel.

Under contract, Rug Doctor will provide Value Markets with equipment and supplies on 1/2/2013. The equipment has a $655,000 fair market value; the supplies has a value of $110,000. Value Markets agrees to pay Rug Doctor $100,000 every three months over two years, 4/2/2013 to 10/2/2015. The rate to discount the cash flows is 8%.

Calculate the total contract price (for revenue recognition).