Techco Inc. sells smartphones as well as data packages. On July 1, 2020, Techco sold Bob McLean a McIntosh 13 device with a two-year data package. Bob signed a contract the terms of which were:

• $95 down,
• 0% interest, and
• $95 per month on the 1st of the month for the next 23 months.

HST at 13% (the sale was made in Ontario where HST is 13%) is charged on all payments made under the deal.

The stand-alone monthly value of the data plan is $50. At the time of sale, Techco required Bob provide a credit card to make the $107.35 ($95 + 13% HST) down payment. The contract authorizes Techco Inc. to charge Bobs credit card $107.35 on the 1^st of each of the following 23 months. A 24% interest rate would be appropriate for the credit risk Techco is assuming, since no credit checks are done at the time of sale.

Techcos cost of McIntosh 13 smart phones if $434. Techcos normal mark-up on the smartphones it sells is 100%.

Techco Inc. has a December 31 year end and prepares financial statements annually.

Required:

1. How much revenue will be recorded by Techco in 2020? Show all calculations and label all amounts.

(Round to the nearest dollar.)

2. What was Techcos gross profit on the sale of the McIntosh 13 device.

*HINT #1: There is no need to discount the payments for the data plan, as services under the plan are not being received at the time the contract is signed.

*HINT #2: There is no need to discount any of the HST payments. HST is not due until Bobs card is billed.