Berry Farm produces organic tomatoes and strawberries. In June 2018, it transpor

Question

Berry Farm produces organic tomatoes and strawberries. In June 2018, it transported 110 boxes of strawberries with a price of $21 per box to the Bay Farmers’ Market. Berry Farm paid an upfront fee of $170 to present its products at the market for one week, and the market earns a 20% profit margin on each item sold, but Berry Farm is responsible for any items that remain unsold at the end of the week. Required: The market was able to sell 65 boxes of strawberries to customers. How much revenue should Berry Farm recognize with respect to this transaction?

Explanation / Answer

Revenue for 65 boxes is realised

so, recognise revenue of 65 boxes is :-

= 65 * $21

= $1365

for the rest of 45 boxes revenue not recognised

because the certainty of sale is not there.

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