(Determining when to recognize revenue, LO 1, 2) For each of the following situations, use the four GAAP revenue-recognition criteria to determine when revenue should be recognized. Explain your reasoning.

a. An ice cream vendor sells an ice cream sandwich to a child at a local park for

$1.50 cash.

b. A parents’ magazine sells a three-year subscription to a new subscriber for $33.

The subscriber makes the payment when she subscribes.

c. A furniture store has a “don’t pay for a year” event. Customers take delivery of their furniture immediately but do not have to pay until twelve months later.

d. A software manufacturer sells a computer game. The company promises to provide the next two upgrades to the program free of charge.