Indicate how much income Sunland should recognize in January, February, March, and April.
Indicate how much income Sunland should recognize in January, February, March, and April.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sunland, Inc. is a distributor of prepaid telephone cards to customers in its convenience stores. When Sunland sells the cards, it then pays the telecommunications company, TeleExpress, less a commission of 20 percent of the selling price to customers. Sunland receives $4,200 in cards in January 2020. Sunland sold 45% of the cards in February, 30% in March, and 25% in April. It costs TeleExpress $3,000 to provide the telephone service on the cards sold by Sunland.
Indicate how much income Sunland should recognize in January, February, March, and April.
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