Answer no. 21 and 22 thank you
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer no. 21 and 22 thank you
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Following are the answers to respective questions
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21. Since both the companies are new in the business and there is an inherent risk, the best approach for Lark corp is the recognise revenue on the basis of cost recovery method
- Total costs to date = $ 2,040,000
- Costs of 2014 = $980,000
- Costs for the year = $2,040,000 - $980,000 = $1,060,000
Thus Lark corp must recognise a revenue of $1,060,000
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