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On May 1, 2018, Varga Tech Services signed a $117,000 consulting contract with Shaffer Holdings. The...

On May 1, 2018, Varga Tech Services signed a $117,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the period from May 1, 2018, to April 30, 2019, with Shaffer paying the entire $117,000 on May 1, 2018.

How much revenue should Varga recognize in 2018?

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Answer #1

The revenue that Varga recognize in 2018 is computed as shown below:

= $ 117,000 / 12 months x 8 months

= $ 78,000

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