Question
On January 1, Year 1, Mike Co. entered into a contract with a customer to sell a machine for two annual payments of $112,154 starting
On January 1, Year 1, Mike Co. entered into a contract with a customer to sell a machine for two annual payments of $112,154 starting at the end of Year 1. The customer obtains control of the machine at contract inception. The cash selling price of the machine is $200,000. Mike determined that (1) the contract includes a significant financing component and (2) the contract includes an implicit interest rate of 8%. What amounts of revenue and interest income from this contract, if any, were recognized by Mike in Year 2?
|
| Revenue from Customers | Interest Income |
| A. | $0 | $8,308 |
| B. | $112,154 | $0 |
| C. | $100,000 | $12,154 |
| D. | $200,000 | $16,000 |
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Linking Auditing And Meta Evaluation Enhancing Quality In Applied Research
Authors: Thomas A. Schwandt, Edward S. Halpern
1st Edition
0803929684, 978-0803929685
