On July 1, 2019, SEK Company sold goods to Grant Company for R$900,000 in exchange for a 4-year, zero-interest-bearing note with a face amount of R$1,416,163. The goods have a cost on SEK’s books of R$590,000. Questions: (a) How much revenue should SEK Company record on July 1, 2019? (b) How much revenue should it report related to this transaction on December 31, 2019?

On July 1, 2019, SEK Company sold goods to Grant Company for R$900,000 in exchange for a 4-year, zero-interest-bearing note with a face amount of R$1,416,163. The goods have a cost on SEK’s books of R$590,000. Questions: (a) How much revenue should SEK Company record on July 1, 2019? (b) How much revenue should it report related to this transaction on December 31, 2019?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 67P

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Question

Facts: On July 1, 2019, SEK Company sold goods to Grant Company for R$900,000 in
exchange for a 4-year, zero-interest-bearing note with a face amount of R$1,416,163. The
goods have a cost on SEK’s books of R$590,000.
Questions: (a) How much revenue should SEK Company record on July 1, 2019? (b) How much
revenue should it report related to this transaction on December 31, 2019?

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