Question

N November 1, 2018, Taylor signed a one-year contract to provide handyman services on an as-needed basis to King Associates, with the contract to start immediately. King agreed to pay Taylor $5,880 for the one-year period. Taylor is confident that King will pay that amount, but payment is not scheduled to occur until 2019 Taylor should recognize revenue in 2018 in the amount of
A. $0
B. $2,940
C. $5,880
D. $980

Answer 1

Answer:

Revenue = $980

so correct option is D. $980

Explanation:

given data

pay Taylor = $5,880

time = 1 year period

to find out

Taylor should recognize revenue in 2018

solution

we know that here work is started as on 1st November 2018 and take 12 month to complete it mean it take 2 month in 2018 and 10 month in 2019

so we get  revenue for the year 2018 that is only for 2 months.

so

Revenue for the year 2018 is

Revenue = $5,880 × $\frac{2}{12}$

Revenue = $980

so correct option is D. $980