AuctionCo.com sells used products collected from different suppliers. Assume a customer purchases a used bicycle through AuctionCo.com for $300. AuctionCo.com agrees to pay the supplier $200 for the bicycle. The bicyclewill be shipped to the customer by the original bicycle owner.Required:1. Assume AuctionCo.com takes control of this used bicycle before the sale and pays $200 to the supplier. Underthis assumption, how much revenue would AuctionCo.com recognize at the time of the sale to the customer?2. Assume AuctionCo.com never takes control of this used bicycle before the sale. Instead, the bicycle isshipped directly to the customer by the original bicycle owner, and then AuctionCo.com pays $200 to thesupplier. Under this assumption, how much revenue would AuctionCo.com recognize at the time of the saleto the customer?3. Assume AuctionCo.com promises to pay $200 to the supplier regardless of whether the bicycle is sold, butthe bicycle will continue to be shipped directly from the supplier to the customer. Under this assumption, howmuch revenue would AuctionCo.com recognize at the time of the sale to the customer?
AuctionCo.com sells used products collected from different suppliers. Assume a customer purchases a used bicycle through AuctionCo.com for $300. AuctionCo.com agrees to pay the supplier $200 for the bicycle. The bicycle
will be shipped to the customer by the original bicycle owner.
Required:
1. Assume AuctionCo.com takes control of this used bicycle before the sale and pays $200 to the supplier. Under
this assumption, how much revenue would AuctionCo.com recognize at the time of the sale to the customer?
2. Assume AuctionCo.com never takes control of this used bicycle before the sale. Instead, the bicycle is
shipped directly to the customer by the original bicycle owner, and then AuctionCo.com pays $200 to the
supplier. Under this assumption, how much revenue would AuctionCo.com recognize at the time of the sale
to the customer?
3. Assume AuctionCo.com promises to pay $200 to the supplier regardless of whether the bicycle is sold, but
the bicycle will continue to be shipped directly from the supplier to the customer. Under this assumption, how
much revenue would AuctionCo.com recognize at the time of the sale to the customer?
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