Question

Tulane Tires wrote a contract for a $100,000 sale of tires to the new Garden District Tour Company. Tulane only anticipates a slightly greater than 50 percent chance that Garden will be able to pay the amounts that Tulane is entitled to receive under the contract. Upon delivery of the tires, assuming no payment has yet been made by Garden, how much revenue should Tulane recognize under U.S. GAAP

Answer 1

Answer:

zero or nil

Explanation:

The computation of the revenue that should be Tulane recognize under U.S. GAAP is shown below:

As per the GAAP, the probable means it is likely to be occured or as a reasonably predicted based on the available proof. Now this definition derives that it is high occurence so the contract should not be considered for the revenue recognition

Therefore the revenue is zero or nil