Presented below are three revenue recognition situations. a. Groupo sells goods to MTN for $1,000,000, payment due at delivery. b. Groupo sells goods on account to Grifols for $800,000, payment due in 30 days. c. Groupo sells goods to Magnus for $500,000, payment due in two installments, the first installment payable in 18 months and the second payment due 6 months later. The present value of the future payments is $464,000. Indicate the transaction price for each of these situations and when revenue will be recognized.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Presented below are three revenue recognition situations.

  • a. Groupo sells goods to MTN for $1,000,000, payment due at delivery.
  • b. Groupo sells goods on account to Grifols for $800,000, payment due in 30 days.
  • c. Groupo sells goods to Magnus for $500,000, payment due in two installments, the first installment payable in 18 months and the second payment due 6 months later. The present value of the future payments is $464,000.

Indicate the transaction price for each of these situations and when revenue will be recognized.

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