Fare Jewelry Company is holding goods on consignment from Tomko with a selling price of $700,000. Fare is promised a commission of 25% for goods sold. By the end of 2017 Fare has sold $530,000 of goods. Refer to Fare Jewelry. How much revenue should Tomko recognize for 2017 on this transaction?

Question

Quizplus · Accepted Answer

Tomko should recognize revenue of $530,000, which is the amount of goods sold by Fare Jewelry on consignment. The commission is an expense for Tomko, not a reduction in revenue.

Fare Jewelry Company Is Holding Goods on Consignment from Tomko