Reference no: EM133306888

The DeMent Publishing Division sells large volumes of novels to a few book distributors, which in turn sell to several national chains of bookstores. DeMent allows distributors to return up to 30% of sales, and the distributors give the same terms to bookstores. While returns from individual titles fluctuate greatly, the returns from distributors have averaged 20% in each of the past five years. A total of $7 million of paperback novel sales were made to distributors during fiscal 2023. On November 30, 2023 (the end of the fiscal year), $1.5 million of fiscal 2023 sales were still subject to return privileges over the next six months. The remaining $5.5 million of fiscal 2023 sales had actual returns of 21%. Sales from fiscal 2022 totalling $2 million were collected in fiscal 2023 less 18% returns. This division records revenue according to the revenue recognition method when the right of return exists.

Calculate the revenue to be recognized in the 2023 fiscal year for DeMent.