How much revenue beach life would be able to recognize

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Question - Beach Life Ltd. operates an online booking service restricted to beachfront properties around the world. Users of the company's website booked beach rentals totalling $8,300,000 in 2020. Bookings are fully paid for at the time of reservation and are 50% refundable if the reservation is cancelled any time up to 21 days before the reservation date. After that date, the reservations are non-cancellable.

Under the terms of the company's listing agreements with property owners, Beach Life charges a fee of 10% of the total reservation and electronically transfers the balance of cash collected directly to the property owner's bank five days before the reservation date.

Of the 2020 bookings, 90% had been completed before Beach Life's December 31 year end. The balance was still within the cancellation period.

Required - Determine how much revenue Beach Life would be able to recognize in 2020.

Reference no: EM132547653

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