LMZ Computer Systems Inc.maintains office equipment under contract.The contracts are for labour only;customers must reimburse LMZ for parts.LMZ's rate schedule follows:
$$\begin{array} { | l | l | l | l | }
\hline & \text { One year } & \text { Two years } & \text { Three years } \
\hline \text { Photocopies } & \$ 220 & 400 & 620 \
\hline \text { Fax machine } & \$ 175 & 340 & 440 \
\hline
\end{array}$$
LMZ's 2018 sales of maintenance agreements is set out below:
$$\begin{array} { | l | l | l | l | }
\hline & \text { One year } & \text { Two years } & \text { Three years } \
\hline \text { Photocopies } & 20 & 12 & 30 \
\hline \text { Fax machine } & 24 & 20 & 30 \
\hline
\end{array}$$
Required:
Assuming that sales occurred evenly through the year:
a.What amount of revenue will LMZ recognize for the year ended December 31,2018?
b.What amount of deferred revenue will LMZ report as a current liability on December 31,2018?
c.What amount of deferred revenue will LMZ report as a non-current liability on December 31,2018?

Question

LMZ Computer Systems Inc.maintains office equipment under contract.The contracts are for labour only;customers must reimburse LMZ for parts.LMZ's rate schedule follows:
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { One year } & \text { Two years } & \text { Three years } \
\hline \text { Photocopies } & \$ 220 & 400 & 620 \
\hline \text { Fax machine } & \$ 175 & 340 & 440 \
\hline
\end{array}$$ 
LMZ's 2018 sales of maintenance agreements is set out below:
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { One year } & \text { Two years } & \text { Three years } \
\hline \text { Photocopies } & 20 & 12 & 30 \
\hline \text { Fax machine } & 24 & 20 & 30 \
\hline
\end{array}$$ 
Required:
Assuming that sales occurred evenly through the year:
a.What amount of revenue will LMZ recognize for the year ended December 31,2018?
b.What amount of deferred revenue will LMZ report as a current liability on December 31,2018?
c.What amount of deferred revenue will LMZ report as a non-current liability on December 31,2018?

Quizplus · Accepted Answer

The Answer of LMZ Computer Systems Inc.maintains office equipment under contract.The contracts are for labour only;customers must reimburse LMZ for parts.LMZ's rate schedule follows:
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { One year } & \text { Two years } & \text { Three years } \
\hline \text { Photocopies } & \$ 220 & 400 & 620 \
\hline \text { Fax machine } & \$ 175 & 340 & 440 \
\hline
\end{array}$$ 
LMZ's 2018 sales of maintenance agreements is set out below:
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { One year } & \text { Two years } & \text { Three years } \
\hline \text { Photocopies } & 20 & 12 & 30 \
\hline \text { Fax machine } & 24 & 20 & 30 \
\hline
\end{array}$$ 
Required:
Assuming that sales occurred evenly through the year:
a.What amount of revenue will LMZ recognize for the year ended December 31,2018?
b.What amount of deferred revenue will LMZ report as a current liability on December 31,2018?
c.What amount of deferred revenue will LMZ report as a non-current liability on December 31,2018?

LMZ Computer Systems Inc LMZ's 2018 Sales of Maintenance Agreements Is Set Out Below