Question

On May 1, 2018, Varga Tech Services signed a $75,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the period from May 1, 2018, to April 30, 2019, with Shaffer paying the entire $75,000 on May 1, 2018. How much revenue should Varga recognize in 2018? (Do not round intermediate calculation.)

Answer 1

Varga should recognize $50,000 revenue in 2018.

Step-by-step explanation:

Revenue = $75,000 × 8/12 months

= $50,000

Therefore, Varga should recognize $50,000 revenue in 2018.