Question
Telephone Sellers Inc. sells prepaid telephone cards to customers. Telephone Sellers then pays the telecommunications company, TeleExpress, for the actual use of its telephone lines
Telephone Sellers Inc. sells prepaid telephone cards to customers. Telephone Sellers then pays the telecommunications
company, TeleExpress, for the actual use of its telephone lines related to the prepaid telephone cards. Assume that
Telephone Sellers sells $4,000 of prepaid cards in January 2017. It then pays TeleExpress based on usage, which turns out to be
50% in February, 30% in March, and 20% in April. The total payment by Telephone Sellers for TeleExpress lines over the 3 months
is $3,000. Indicate how much income Telephone Sellers should recognize in January, February, March, and April.
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