During 20X3, the company signed contracts to deliver
consulting services with a total value of $2,500,000. By
year's end, $1,600,000 of services had been provided and
billed under these agreements. The other $900,000 of
work will not be performed until 20X4. All amounts
billed had been collected during 20X3, with the exception
of December's billings in the amount of $125,000. The
Skousen's are quite confident that the December billing
will be collected in the normal course of business in
early 20X4.
Shld i take 2.5 mil or 1.6 mil ... accrual based system
... ??
Joined: 11 Mar 2007
Online Status: Offline Posts: 514
Posted: 02 Jul 2010 at 07:18 | IP Logged
If you are asking about, how much to record as "revenue", I'd say 1.6 million, because this is what's earned by rendering the service, other 900 k is not performed yet, and so not earned, and so not revenue.
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