Ask Question
31 January, 22:40

Lewis Co. sold merchandise to AdCo for $43,000 and received $43,000 for that sale one month later. One week prior to receiving payment from AdCo, Lewis made a $9,000 payment to AdCo for advertising services that have a fair value of $5,000. After accounting for any necessary adjustments, how much revenue should Lewis Co. record for the merchandise sold to AdCo?

+2
Answers (1)
  1. 31 January, 22:43
    0
    Revenue recognition = [Transaction price - (Payment to advertisement-fair value)

    Transaction price = $43,000

    Payment to advertisement = $9,000

    Fair value = $5,000

    Thus, the revenue should Lewis co. record for the merchandise sold to Adco is:

    = $43,000 - ($9,000 - $5,000)

    = $39,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Lewis Co. sold merchandise to AdCo for $43,000 and received $43,000 for that sale one month later. One week prior to receiving payment from ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers