Question

correct the first problem then complete the second problem

Brief Exercise 6-25 (Algo) Timing of revenue recognition; licenses (L06-7] Saar Associates sells two licenses to Kim & Company on September 1, 2021. First, in exchange for $110,000, Saar provides Kim with a copy of its proprietary investment management software, which Saar does not anticipate updating and which kim can use permanently. Second, in exchange for $99,000, Saar provides Kim with a four-year right to market Kim's financial advisory services under the name of Saar Associates, which Saar advertises on an ongoing basis. The trade name "Saar Associates" is not well known in the marketplace and the owner provides no advertising or other benefits to a licensee of the Saar Associates trade name during the license period. How much revenue will Saar recognize in 2021 under this arrangement if Saar reports under U.S. GAAP? (Do not round intermediate calculation.) Answer is complete but not entirely correct. Revenue $ 209,000

Answer 1

Saar Associates

Revenue to be recognized in 2021
= $110000 + $99000 x 4/48

Kerianne

Revenue = $230

Since Kerianne has consignement arrangement, with Holmstorm Gallery, revenue will be recognized only on actual sales not on initial transfer