Current Attempt in Progress Sally collects a nonrefundable up-front fee of $192 when a new customer signs up for a 24-month contract for services. A monthly fee of $32 is also assessed for each customer. How much revenue does Sally record on the date the contract is signed?

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valetta valetta · Answer 1 · 2019-10-15T09:03:09+02:00

Answer:

$0

Explanation:

Data provided:

Sally collects a nonrefundable up-front fee = $192

contract for services = 24 months

monthly fee assessed for each customer = $32

Now,

The revenue recorded by the Sally on the date the contract signed will be zero ( i.e $0 )

This is because the revenue will not be recognized until the service has been provided.

Here the upfront fee is charged over the service period of 24 months