Company X is a software company that currently recognizes revenue when the agreement/contract is signed. Company X is considering a more conservative approach by recognizing revenue at the deliver of the product to customer. Therefore, it's considering changing its revenue recognition policy.
Days in receivable under current recognition policy (contract): 160
Days in receivable under new recognition policy (deliver): 120
Note: It is the intent of the problem to use both license and service revenue for calculating the adjusted sales in #1.
Estimate Company X's 1990 sales if revenue is recognized at delivery rather than when the contract is signed. Hint: use the estimate provided by the controller of the effect of recognizing revenue at delivery on days receivable.
Attachment:- Estimating sales.rar