How much is the service revenue recognize on Year 9a. 28b. 60c. 39d. 80e. zero As consideration, the government pays the operator PSOM per year in Years 3 to 10. FFC makes the following estimates atcontract inception:ContractStand-aloneYearselling priceForecast cost + 20%Forecast cost+ 20%costsConstruction services1P5050Operation servicesReconditioning3-1020Forecast cost + 40%9.10Forecast cost + 10%All cash flows are assumed to take place at the end of the year. FFC determines that the implied interest rate in thecontract is 33.05%.

The revenue recognized is the amount that has been recognized in the financial statement of the…

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How much is the service revenue recognize on Year 9 a. 28 b. 60 c. 39 d. 80 e. zero

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 18PC

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