eBay sells used products collected from different suppliers. Assume a customer purchases a used bicycle through eBay for $300. eBay agrees to pay the supplier $200 for the bicycle. The bicycle will be shipped to the customer by the original bicycle owner.  Assume eBay takes control of the bicycle before the sale and pays $200 to the supplier. How much revenue would eBay recognize at the time of the sale to the customer? Why?

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
Chapter2: Financial Reporting: Its Conceptual Framework
Section: Chapter Questions
Problem 11C
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eBay sells used products collected from different suppliers. Assume a customer purchases a used bicycle through eBay for $300. eBay agrees to pay the supplier $200 for the bicycle. The bicycle will be shipped to the customer by the original bicycle owner. 

  1. Assume eBay takes control of the bicycle before the sale and pays $200 to the supplier. How much revenue would eBay recognize at the time of the sale to the customer? Why?

 

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