Question

Robbie Inc. estimated that it will receive $60,000 of consideration for providing services to Stan Company over a 6-month period. Robbie properly accrues $10,000 each month; after two months, Robbie estimates that the total consideration it will receive is only $50,000. For each of the remaining months, Robbie should recognize service revenue of:__________

Answer 1

Answer:

$8,333 per month

Explanation:

Based on the scenario being described within the question it can be said that  Robbie should recognize service revenue of $8,333 per month. This is mainly due to the fact that he has estimated a TOTAL consideration of $50,000 for the six months. Therefore you would need to divide that by the six months which would leave you with a service revenue of $8,333  per month.

$50,000/6 = $8,333  per month.