Target Security Company Provides Surveillance Services to Numerous Corporate Customers

question 45

Essay

Target Security Company provides surveillance services to numerous corporate customers. The company has recently signed a new surveillance contract with Martin Manufacturing on January 1 for a period of one month at a cost of $ 500. On January 31, Target completed the contract and invoiced Martin for the full contract price due in 30 days.
Instructions
Complete the following steps to determine if the appropriate criteria have been met for Target to recognize revenue under the contract-based approach to revenue recognition. Be sure to conclude whether Target can recognize the revenue and when it would be appropriate to do so.
1. Is there a contract?
2. What is the performance obligation?
3. What is the transaction price?
4. Is there a need to allocate the selling price?
5. Has the performance obligation been satisfied?

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Definitions:

Functional Categories

Encompasses the groupings of words in linguistics that serve grammatical purposes, unlike lexical categories that add content or meaning to the discourse.

Defragment

The process of consolidating fragmented files on a disk to improve the system's efficiency.

Optimize

The process of making something as effective or functional as possible, often through improving the efficiency of the operation or design.

Control Panel

A component of the operating system that allows users to modify system settings and control hardware functions.