For this discussion, I would like you to walk us through the following examples of applying the Revenue Recognition Principle and each of the five steps used to apply the principle. After you select one of the following examples, your response should clearly identify each of the 5 steps and how you are interpreting/applying each of them to arrive at your conclusion.

`1. Your colleague is getting up to speed on the new guidance on revenue recognition. They are trying to understand the revenue recognition principle as it relates to the five-step revenue recognition process. Recommended responses should be 2-3 paragraphs each.

Please answer in detail! 

Required: a. Explain in detail the basic premise of revenue recognition, the model used to recognize revenue, and the 5-step process under the new standard.

b. What is a performance obligation and under what circumstances do one or more performance obligations exist?

c. If a contract modification is determined not to result in a separate contract, how are the subsequent transactions accounted for?

d. What is the proper accounting for volume discounts on sales of products when there is uncertainty about whether the discounted volume level will be attained?

e. Provide two examples of variable consideration. What are the two approaches for estimating variable consideration and how does a company determine which approach should be used?

f. Under what conditions does a company recognize revenue over a period of time?

g. Describe the conditions when contract assets and contract liabilities are recognized and presented in financial statements.

2. IT Services Co. provides online technology support for consumers remotely via the Internet. For a flat fee, it will scan a customer’s personal computer (PC) for viruses, optimize the PC's performance, and solve any connectivity problems. When a customer calls to obtain the scan services, IT Services Co. describes the services it can provide and states the price for those services. When the customer agrees to the terms stated by the representative, payment is made over the telephone. IT Services Co. then provides the customer the information needed to obtain the scan services (e.g., an access code for the website) and provides the services when the customer connects to the Internet and logs onto IT Services Co.’s website, which may be that day but may also be at a future point in time. **Recommended responses should be 1-2 paragraphs each. Please answer in detail! Required:

a. List the criteria for determining if there is a contract with a customer and determine if there is a contract in this scenario

. b. If so, when is revenue recognized?

3. TurboCard credit card company offers a loyalty program to its credit card users whereby the credit card company gives the credit card user points for amounts purchased from merchants when using the credit card. These points may be accumulated and redeemed for a number of different goods or services, including cash-back. TurboCard separately enters into arrangements with merchants under which the credit card company provides the financing for the transaction between the merchant and the credit card user, in return for which the credit card company receives a stated fee from the merchant. When the credit card user uses the credit card to make a purchase from a merchant, TurboCard honors its agreement with the merchant and advances the merchant the funding for the amount of the transaction after deducting the fee to which the credit card company is entitled. However, as a result of that transaction, TurboCard now also has an obligation to the credit card used to provide the specified number of points in the loyalty program. Recommended responses should be 1-2 paragraphs each. Please answer in detail! Required:

a. How many performance obligations are involved in these activities?

b. Assuming there are two performance obligations, how would the revenue be recognized?

c. Assuming there is only one performance obligation, how would the revenue be recognized?