Consider the following transactions of Parolini Company for 2005.

For each item, indicate the amount of revenue Parolini Company should recognize in calendar year 2005. Explain Why.

1.) Leased office space to Easley Supplies for a 1-year period beginning September 1. The rent of $24,000 was paid in advance.

2.) Sold a 6-month insurance policy to Orosco Corporation for $8,000 on March 1.

3.) Received a sales order for merchandise costing $9,000 and a sales price of $14,000 on December 28 from Gutierrez Company. The goods were shipped FOB shipping point on December 31. Gutierrez received them on January 3, 2006.

4.) Signed a long-term contract to construct a building at a total price of $1,600,000. Total estimated cost of construction is $1,200,000. During 2005, the company incurred $300,000 of costs and collected $330,000 in cash. The percentage-of-completion method is used to recognize revenue.

5.) Had merchandise inventory on hand at year-end that amounted to $160,000. Parolini Company expects to sell the inventory in 2006 for $190,000.