Mulligan Company collected $12800 in May of 2016 for 5 months of service which would take place from October of 2016 through February of 2017. The revenue reported from this transaction during 2016 would be
A) $0.
B) $5120.
C) $7680.
D) $12800.

Question

Quizplus · Accepted Answer

The revenue for 2016 would be for the months of October, November, and December, which is 3 out of the 5 months. Therefore, the revenue recognized in 2016 is (3/5) * $12800 = $7680.

Mulligan Company Collected $12800 in May of 2016 for 5