Answered: Is this accounted for as a new…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject: accounting

Blossom Co. has a contract to sell 105 products to a customer for $11,025 ($105 per product) at various times over a six-month period. After 80 products have been delivered, Blossom modifies the contract by promising to deliver 20 extra products for an additional $1,900, or $95 per product (which is the stand-alone selling price of the products at the time of the contract modification).

Blossom regularly sells the products separately and they are considered to be distinct.

Is this accounted for as a new contract?

Calculate the total amount of revenue yet to be recognized.

Total revenue

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