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Greenwell Farm Equipment sells a tractor to Farmer for $150,000 on January 1, 2019. The tractor is delivered that day. Greenwell agrees that the Farmer may delay the payment for 2 years. The market rate of interest is 10%. Refer to Greenwell Farms. How much sales revenue will Greenwell report on January 1, 2019? Use the formula approach.


A) $150,000
B) $135,000
C) $165,000
D) $123,967

E) B) and C)
F) A) and D)

Correct Answer

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Which one of the following approaches is not a method for allocating a transaction price to multiple performance obligations?


A) adjusted market assessment
B) expected-cost-plus-a-margin
C) residual
D) present cost basis

E) A) and C)
F) A) and B)

Correct Answer

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Jones Corporation enters into a contract with Warner Video to add their programs to Jones' network. Warner will pay Jones an upfront fixed fee of $250,000 for 12 months of access, and will also pay a $130,000 bonus if Jones' users access Warner Video for at least 10,000 hours during the 12 month period. Jones estimates that it has a 60% chance of earning the $130,000 bonus. Ignore any constraints on variable consideration. Refer to Jones Corporation. Using the most-likely-amount approach, the transaction price would be ________.


A) $130,000
B) $250,000
C) $328,000
D) $380,000

E) A) and B)
F) A) and D)

Correct Answer

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Fare Jewelry Company is holding goods on consignment from Tomko with a selling price of $3,000,000. Fare is promised a commission of 25% for goods sold. By the end of 2019 Fare has sold $700,000 of Tomko's goods. How much revenue should Tomko recognize for 2019 on this transaction?


A) $0
B) $3,000,000
C) $2,300,000
D) $700,000

E) None of the above
F) All of the above

Correct Answer

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