Orange, Inc., sells a LearnIt-Plus software package that consists of their normal LearnIt math tutorial program along with a one-year subscription to the online LearnIt Office Hours virtual classroom. LearnIt-Plus retails for $400. When sold separately, the LearnIt math tutorial sells for $435, and access to the LearnIt Office Hours sells for $290 per year.
How much revenue will be recognized upon delivery of the LearnIt software?
How much revenue will be deferred and recognized over the life of the one-year period in which the Office Hours are delivered?
If Orange did not sell the LearnIt Office Hours separately, but believed it would price it at $290 per year.
How much revenue will be recognized upon delivery of the LearnIt software?
How much revenue will be deferred and recognized over the life of the one-year period in which the Office Hours are delivered?