Sanjeev enters into a contract offering variable consideration. The contract pays him $5,000/month for six months of continuous consulting services. In addition, there is a 60% chance the contract will pay an additional $5,000 and a 40% chance the contract will pay an additional $6,000, depending on the outcome of the consulting contract. Sanjeev concludes that this contract qualifies for revenue recognition over time.

Assume Sanjeev estimates variable consideration as the expected value. What is the amount of revenue Sanjeev would recognize for the first month of the contract?

		$5,833
		$5,900
		$2,000
		$5,000

Fred's Auto Sales has arranged to provide zero interest financing to customers who buy a new car. On April 26, Marcos purchases a new pickup truck under the zero financing program. The loan will require 72 monthly payments of $750. The market interest rate for similar loans is 6%. How much will Fred recognize as revenue on April 26?

		$44,256
		$12,311
		$45,481
		$45,255

Best Bath sells gift cards redeemable for Best Bath products either in-store or online. During 2018, Best Bath sold $4,000,000 of gift cards, and $3,600,000 of the gift cards were redeemed for products. As of December 31, 2018, $300,000 of the remaining gift cards had passed the date at which Best Bath concludes that the cards will never be redeemed. How much gift card revenue should Best Bath recognize in 2018?

		$3,800,000
		$4,000,000
		$3,900,000
		$3,600,000

On June 1, Parson Assoc. sold equipment to Arleo and agreed to accept a 3-month, $50,000, 10% interest-bearing note in payment at a time when the prevailing rate of interest for similar transactions was 10%. When the note was collected upon maturity, Parson would recognize interest revenue of:

		$3,750.
		$1,250.
		$2,500.
		$0

Pluto Electronics sells televisions and provides television maintenance services. On July 1, Pluto sold a package deal containing a television and a one-year unlimited maintenance/repair service for $2,000. If sold separately, the computer costs $1,680 and the one-year unlimited maintenance/repair service costs $720. How much revenue does Pluto Electronics recognize for the month of July?

		$60
		$1,740
		$1,450
		$2,000

Verizon Wireless Inc. offers a 3-month coupon for headphones when a smartphone is purchased. The headphones normally have a price of $150, but Verizon coupon price is $120. Verizon anticipates a 75% chance that a customer will purchase the headphones using the coupon. What is the total stand-alone selling price that Verizon would use for the headphone coupon for purposes of allocating revenue among the performance obligations in a smartphone contract?

		$0
		$22.50
		$120.00
		$30.00