Question
Clement Corp., a pharmaceutical manufacturer, licensed a drug patent to Global Corp. for royalties of 5% of drug sales. Royalties are payable twice yearly on
Clement Corp., a pharmaceutical manufacturer, licensed a drug patent to Global Corp. for royalties of 5% of drug sales. Royalties are payable twice yearly on April 15 for sales from July through December of the previous year and on October 15 for January June same-year sales. In year 8, Global paid royalties of $20,000 and $25,000 on April 15 and October 15, respectively. In response to Globals estimate of July December sales of the drug, Clement correctly recognized $43,000 in royalty revenue in its financial statements dated December 31, year 8. What was Globals sales estimate for the second half of year 8?
Multiple Choice
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$500,000
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$360,000
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$400,000
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Cannot be determined from information given.
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