Individual Homework #1 Page 7 of 17 Scenario #3: Bow Tie Pathetic Industries (8 points) On May 1, 2017, Bow Tie Pathetic Industries signed a contract with No Backbone Mfg. Corp. to deliver and install a computer network by May 31, 2017 for a fee of $950,000 due upon installation. Under the contract, Bow Tie Pathetic Industries must also provide monthly technical services on the network for one year beginning on June 1, 2017. Bow Tie Pathetic Industries estimated that of the $950,000 total contract price $860,000 related to the computer network with the remaining $90,000 relating to the maintenance and repairs services. Bow Tie Pathetic Industries delivered and installed the computer network on May 31, 2017. Bow Tie Pathetic Industries received a check for $950,000 from No Backbone Mfg. Corp. on May 31, 2017 as required under the contract. Bow Tie Pathetic Industries performed the monthly technical services on the network beginning on June 1 2017 through May 31, 2018 as required by the contract. (4 points each line = 8 points) 2017 2018 a) How much sales revenue was Bow Tie Pathetic Industries allowed to recognize from the contract with No Backbone Mfg. Corp. in its 2017 and 2018 GAAP comprehensive income statements? b) How much technical services revenue was Bow Tie Pathetic Industries allowed to recognize from the contract with No Backbone Mfg. Corp. in its 2017 and 2018 GAAP comprehensive income statements? SUPPORTING COMPUTATION REQUIRED