A communications company sells a phone and a 2-year non-cancellable cellular communications service contract from $100 per month ($2,400 in total). A customer can buy the phone without a contract for $500 and a customer can provide their own phone and just buy the 2-year service contract for $50 per month. Approximately how much of the contract price can be

A communications company sells a phone and a 2-year non-cancellable cellular communications service contract from $100 per month ($2,400 in total). A customer can buy the phone without a contract for $500 and a customer can provide their own phone and just buy the 2-year service contract for $50 per month. Approximately how much of the contract price can be

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a...

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Question

A communications company sells a phone and a 2-year
non-cancellable cellular communications service
contract from $100 per month ($2,400 in total). A
customer can buy the phone without a contract for
$500 and a customer can provide their own phone and
just buy the 2-year service contract for $50 per month.
Approximately how much of the contract price can be
recognized when the phone is delivered to the
customer?
O $500
O $100
$706
O $2,400
O $1,694

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