Daniel White signs a 1-year contract with Blossom Video. The terms of the contract are that Daniel is required to pay a nonrefundable initiation fee of $88. No annual membership fee is charged in the first year. After the first year, membership can be renewed by paying an annual membership fee of $5 per month. Blossom determines that its customers, on average, renew their annual membership three times after the first year before terminating their membership. What amount of revenue should Blossom recognize in its first year?

Daniel White signs a 1-year contract with Blossom Video. The terms of the contract are that Daniel is required to pay a nonrefundable initiation fee of $88. No annual membership fee is charged in the first year. After the first year, membership can be renewed by paying an annual membership fee of $5 per month. Blossom determines that its customers, on average, renew their annual membership three times after the first year before terminating their membership. What amount of revenue should Blossom recognize in its first year?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6C: On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp....

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