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How much revenue should be recognized by cpa company

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Reference no: EM133096014

Question - CPA Company entered into the following transactions in connection with its business operations as dealer of auto supplies and related services:

i. Sold second hand spare tires to Doubtful Liner (DL) in exchange for promissory note with face value of P120,000, payable after 2 years.  The note bear interest of 6%, payable annually, when the prevailing rate of interest at the time of sale was 12%.

ii. Rendered significant volume of auto repair services to Dispair Trading in exchange with another promissory note with face value of P210,000.  The notes issued by DT is non-interest bearing, payable in 3 years and the services rendered has cash equivalent price of P175,000.

Required - How much revenue should be recognized by CPA Company on the year of sale?

Reference no: EM133096014

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