Bruges Electronics Inc

question 24

Multiple Choice

Bruges Electronics Inc. offers one model of laptop computer for £1000 and a two-year warranty for £250. The retailer, as part of a Boxing Day promotion, offers a limited-time offer for the laptop, including delivery and the two-year warranty for £1,180. The cost of the computer to Bruges is £700. Any warranty repairs are assumed to be done ratably over time. Bruges accounts for transactions using the customer consideration model. In the first twelve months following the sale, Bruges incurred £980 of costs servicing the computers under warranty.
Bruges sells ten laptops to Brussels Inc. under the limited-time promotion. Upon delivery of the laptops to Brussels, Bruges will recognize revenue of:

• A) £9,300.
• B) £9,440
• C) £10,000.
• D) £11,800.

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Definitions:

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