Required:For each of the cases,

1. determine when the seller should recognize revenue (a) over time or (b) when the product or service is completed.

2.Explain your answer using GAAP revenue recognition guidelines.

3. Explain how each wouldappear on the income statement and balance sheet for 2017.

Case 1:Your construction company entered into a fouryear contract to build a store for a fixed price of $8,000,000.You estimated your costs at 6,500,000.At the end of the 3rd year you estimated that you are 75% complete and your estimate to completewill be 8,500,000 because of labor problems.What are the two alternative methods that can be used to record revenue on this project and what is the affect if:

1. You estimate a total loss on the project.

2.You believethat the estimated costs can be reducedand you will make an overall profit on the project.

Case 2:Your company sells both new and used printers.Some of the printers are used as samples on the floor by the company for3 months, and then sold at reduced prices.Should the sale of theused printers be recorded as revenue or gain on sale?

Case 3-Your company sells a product bundle of software andservicefor$100,000,The3 year service agreement has a value of $25,000 if sold separately.Your company installedthe software on July 1, 2017, and the client paid $60,000; thebalance is due on December 31, 2017. Identify the performance obligations and the revenue in 2017,assuming:(a) the performance obligations are interdependent and b) the performance obligations are not interdependent