Fare Jewelry Company is holding goods on consignment from Tomko with a selling price of $4,000,000. Fare is promised a commission of 25% for goods sold. By the end of 2019 Fare has sold $600,000 of Tomko's goods. Refer to Fare Jewelry. How much revenue should Fare recognize for 2019 on this transaction?

Question

Quizplus · Accepted Answer

Fare Jewelry should recognize revenue based on the commission earned from the sales made. Since they sold $600,000 worth of goods and earn a 25% commission, the revenue recognized is $600,000 * 25% = $150,000.

Fare Jewelry Company Is Holding Goods on Consignment from Tomko