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GOOD LAWNS, INC (the service provider) and CUSTOMER A enter into an agreement for GOOD LAWNS to provide monthly landscaping services to CUSTOMER A.
GOOD LAWNS, INC (the service provider) and CUSTOMER A enter into an agreement for GOOD LAWNS to provide monthly landscaping services to CUSTOMER A. Monthly services will begin on September 1, 2020 for $1,000 per month. These terms will last for 2 years (24 months) and then the price or service can be renegotiated. Either company can cancel the agreement at anytime as long as the services performed are completed and paid for to cancelation date. On September 1, 2020 CUSTOMER A pays GOOD LAWNS $6,000 and the services begin. The $6,000 will be used to pay for the Sept 2020 Feb 2021 landscaping services. Assume the monthly services continue until the end of the contract. Assuming the Sept 1, 2020 payment is the only one made until later in 2021, answer the following questions related to GOOD LAWNS financial statements. (They follow GAAP) How much landscaping revenue should GOOD LAWNS record for each time period below. GOOD LAWNS, Inc uses a Jan-Dec calendar year (as in most class examples) and follows GAAP/accrual basis: Revenue over the entire 2 year contract $ Revenue for 2020? $
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