Q1: Damian Company operates a construction company. On January 1, 2021, Damian Company negotiates a new contract with Horton Hockey Association and agrees to construct a large complex for the hockey association in four phases over a 12-month period at a total cost of $1,600,000. The complex will not be usable until all construction is complete.

When should Damian Company record revenue? List the amount of revenue that should be recorded at the appropriate date. Also, explain your rationale using principles of accrual accounting. What additional information would be helpful in arguing your clients case? Explain.

Present a persuasive argument for your client, the taxing authority. The taxing authoritys objective is to have Damian Company record revenue as soon as possible based on the revenue recognition principle of accrual accounting.