Wear It Again Sam sells good- quality used clothing. People with wardrobe items they no long want or need can bring it to the Wear It Again Sam store where it will be sold on the person's behalf.

The customer and the store manager agree on a selling price for the clothing items and they are displayed in the store. Items are displayed in the store for three months.

In the first month at the agreed price, in the second month at a 30 percent discount, and in the third month at a 60 percent discount. If an item is unsold after three months the owner can pick it up or it's given to charity. If the item sells, the person receives 50 percent of the selling price and Wear It Again Sam keeps 50 percent.

About 15 percent of the time, an item of clothing is sold but the person doesn't come in collect her money.

Required:

When should Wear It Again Sam recognize revenue on the sale of clothes and how much should it recognize? Explain your answer. Don't forget the money that isn't collected.