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Mariana [72]
3 years ago
10

On May 1, 2021, Varga Tech Services signed a $18,000 consulting contract with Shaffer Holdings. The contract requires Varga to p

rovide computer technology support services whenever requested over the period from May 1, 2021, to April 30, 2022, with Shaffer paying the entire $18,000 on May 1, 2021. How much revenue should Varga recognize in 2021?
Business
1 answer:
likoan [24]3 years ago
5 0

Answer:

The correct answer is $12,060.

Explanation:

According to the scenario, the given data are as follows:

Varga tech total revenue = $18,0000

Contract date = May.1, 2021

So, remaining months in completion of 2021 = May - Dec = 8 months

So, we can calculate the Varga revenue by using following method:

Varga revenue in 2021 =  Total revenue × Remaining month ÷ Total months

By putting the value, we get

Varga revenue = $18,000 × 8 ÷ 12

= $18,000 × 0.67

= $12,060

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