In 2014,a major drug company agreed to give a not-for-profit private college $1,700,000 to perform testing of a new drug.An advance payment of $700,000 was received in 2014.The college was to receive $4,000 per individual test.In 2014,the college completed 100 tests.How much revenue should the college report for 2014?

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The college received an advance payment of $700,000, but revenue is only recognized when the tests are completed. The college completed 100 tests at $4,000 per test, so the total revenue for 2014 would be $400,000 ($4,000/test x 100 tests). The initial $700,000 payment would not be counted towards revenue until the tests are completed.

In 2014,a Major Drug Company Agreed to Give a Not-For-Profit