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In 2020, to help with their testing Cue All Ltd entered into contracts with 2 major hospitals to further test government approved medications. The contract

In 2020, to help with their testing Cue All Ltd entered into contracts with 2 major hospitals to further test government approved medications. The contract benefits allowed Cure All Ltd to undertake observation and general medical update training of staff and testing for all patients for medication outcomes.

The contracts totalled $1,000,000 of revenue for Cure All Ltd. The amount was made up of providing equipment to the value of $400,000, medications would usually be sold for $850,000 but were provided at a discounted price of $510,000 and training of hospital staff $90,000. Equipment was to be provided at the start of the contract, training and medications were to be provided evenly each month over the two year period.

Due to funding constraints the Hospitals agreed to pay Cure All Ltd $41,667 per month, to spread the total contract amount of $1,000,000 evenly across the two years.

What is the amount of revenue Cure All Ltd can recognise in the first month of the second year of the contract?

a.$3,750

b.$25,000

c.$21,250

d.$41,667

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