Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Dowell Manufacturing contracts to produce bumper cars for Five Flags Parks. Under the terms of the contract, Five Flags will pay Dowell a total of
Dowell Manufacturing contracts to produce bumper cars for Five Flags Parks. Under the terms of the contract, Five Flags will pay Dowell a total of $60,000 when bumper cars are delivered six months later, and Five Flags can cancel the contract but must pay $12,000 to Dowell. Dowell believes that, if Five Flags cancelled the contract, Dowell could sell the bumper cars to another park. As of December 31, 2020, the job is 80% complete. How much revenue should Dowell recognize in 2020 for this contract?
a. $0
b. $12,000
c. $30,000
d. $48,000
e. $60,000
Dowell Manufacturing contracts to produce bumper cars for Five Flags Parks. Under the terms of the contract, Five Flags will pay Dowell a total of $60,000 when bumper cars are delivered six months later, and Five Flags can cancel the contract but must pay $12,000 to Dowell. Dowell believes that, if Five Flags cancelled the contract, Dowell could sell the bumper cars to another park. As of December 31, 2020, the job is 80% complete. How much revenue should Dowell recognize in 2020 for this contract?
| a. | $0 | |
| b. | $12,000 | |
| c. | $30,000 | |
| d. | $48,000 | |
| e. | $60,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started