BMC has successfully built a practice that services small businesses by providing accounting related services. BMC will provide free training and initial implementation of accounting records through QuickBooks but requires a monthly subscription in order to access the account information. This training is otherwise provided for a one-time fee of $10,000. Upon subscription ($10k/month), BMC will perform all related accounting functions for the small business using QuickBooks. The subscription requires a 3 year contract. Premium Services can be purchased at a 20% discount, if included in the contract, which includes 24/7 direct hotline to senior accountants within BMC. The Premium Services are routinely sold at standalone prices of $100/hr. BMC estimates that a typical client will utilize this service on average of 40 hours a month. Perform the 5 steps of Revenue Recognition assuming a client purchased the maximum package. Assume the estimate and actual hours for Premium Services has no variances. Record all necessary entries for the first year of the contract
BMC has successfully built a practice that services small businesses by providing accounting related services. BMC will provide free training and initial implementation of accounting records through QuickBooks but requires a monthly subscription in order to access the account information. This training is otherwise provided for a one-time fee of $10,000. Upon subscription ($10k/month), BMC will perform all related accounting functions for the small business using QuickBooks. The subscription requires a 3 year contract. Premium Services can be purchased at a 20% discount, if included in the contract, which includes 24/7 direct hotline to senior accountants within BMC. The Premium Services are routinely sold at standalone prices of $100/hr. BMC estimates that a typical client will utilize this service on average of 40 hours a month. Perform the 5 steps of Revenue Recognition assuming a client purchased the maximum package. Assume the estimate and actual hours for Premium Services has no variances. Record all necessary entries for the first year of the contract
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