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How much Service Revenue is recognized in years

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Question - As consideration, the government pays the operator $80,000,000 per year in years 3-10. FFC makes the following estimates at contract inception.

Construction Services for years 1 & 2 with a contract costs of $50 and Stand-alone selling price at forecast cost+20%

Operation Services for years 3-10 with a contract costs of $20 and Stand-alone selling price at forecast cost+40%

Reconditioning for year 9 with a contract costs of $10 and Stand-Alone Selling price at forecast cost+10%

All cash flows are assumed to take place at the end of the year. FFC determines that the implied interest rate in the contract is 33.05%

How much Service Revenue is recognized in years 2 & 5?

Reference no: EM132600827

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