Answer:
The correct answer is $740
Explanation:
The amount which will be recognized by Taylor as revenue in the year 2021 is computed as:
Amount = Agreed amount to pay × Number of months/ Total months
where
Agreed amount to pay is $4,440
Number of months is 2 months (that is November and December)
Total months in a year is 12
Putting the values above:
Amount = $4,440 × 2/12
Amount = $740
This arrangement qualifies for the recognition of revenue over the time as the customer consumes the advantage of the seller service as the seller offers. Therefore, Taylor would be acknowledge the revenue of $740 .
