Question
Robi Inc. manufactures and services complex robotic equipment for other companies. One of its most popular items is a robotic factory floor vacuum system which
Robi Inc. manufactures and services complex robotic equipment for other companies. One of its most popular items is a robotic factory floor vacuum system which continuously moves around the floor removing small debris and oil. The system requires frequent maintenance. On 1/1/x4, Robi sold and delivered such a vacuum system to CTrip Inc., a bicycle manufacturing firm. Robi also agreed to include a 2-year maintenance contract in the sale. The maintenance contract starts 1/1/x4. The parties agreed to a contract price of $70,000. Robi sells this type of 2-year maintenance contract separately for $20,000. The stand alone price of the vacuum system is $60,000. What amount of revenue does Robi recognize for 20x4?
a. 70,000 | ||
b. 61,250 | ||
c. 80,000 | ||
d. 64,250 | ||
e. 58,500 |
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