Question

On 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 $4,680 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 ________.

Answer 1

Answer:

$780

Explanation:

Since King agreed to pay Taylor $4,680 for the one-year period which is divisible into 12 months

On the other hand Taylor is confident that King will pay that amount, but payment is not scheduled to occur until 2019, Therefore the amount to be recognized in 2018 will 2 months comprising November and December.

Therefore 2018 revenue = 2 / 12 x $4,680 = $780