Scenario 1 Goods are sold FOB destination. Tic Tac Corp. sold an air conditioner with a selling price of $10,200 to Cool Down Inc. The air conditioner was loaded on a delivery truck and shipped February 27, but did not arrive and get unloaded at Cool Down's warehouse until March 8. Required: a) Determine the month the $10,200 revenue (for Tic Tac Corp.) should be recognized in.
Scenario 2 A security company delivers a security camera to a customer's house on March 21. Installation of the camera is completed by March 31. Included in the cost of the camera is 6 months of monitoring by the security company following the month of installation. The value of the camera is $4,000, the value of the installation services is $750 and the value of the monitoring is $2,700. Required: a) Determine the month to record the revenue relating to the sale of the camera. (1 mark) b) Determine the month to record the revenue relating to the installation of the camera. (1 mark) c) Determine the month the monitoring revenue should start being recorded in. (1 mark) d) Calculate the monthly amount of monitoring revenue that should be recognized.