Each of the following are independent situations. For each of the situations, use the 5-step process to determine when revenue can be recognized by indicating for each of the situations:

1. If a contract exists

2. The performance obligations in the contract

3. The transaction price in the contract

4. How the transaction price is allocated to the performance obligations.

5. When revenue is recognized

Situation A:

Freddy Flyer books travel on an airline on June 2, 2027. He pays $500 for a round-trip ticket that departs July 15, 2027 and returns July 20, 2027. In addition, once the round-trip ticket is used, the airline credits Freddys frequent flyer account for 500 miles based on a $.01 value for each frequent flyer point.

Situation B:

Daves Discount Emporium and Creative Construction, Inc. enter into a contract on May 1, 2027. Creative will build a new warehouse for Dave at a price of $2,000,000. Dave will make four equal payments to Creative over the 1-year construction period with the first payment made on May 1, 2027 and the other payments made every 4 months. Dave can cancel the construction at any time and will own any parts of the construction to date; however, it must pay Creative for work done up to the date of cancellation. The building is completed on April 30, 2018.

Situation C:

Doggone Good Donuts agrees to supply donuts and coffee to Better Brakes, a local business that manufacturers automobile break components, on a daily basis. The contract starts on January 1, 2027, and runs for 1 year. Doggone charges $400 per week for the donuts and coffee.

Situation D:

The Northville Nuggets sell four season tickets to a customer. The Nuggets play 10 regular season games, and the cost of one season ticket is $250.

Situation E:

Lazy Days Inc. enters into a contract with Hyper Hands Co. to sell it $50,000 of goods with delivery on May 10, 2027. Lazy manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2027 and Hyper pays $25,000 at that time Lazy delivers the goods on May 10, 2027, and receives the final payment.