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How much should the company report as cost of sales

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A company produced a "made for TV" movie at a total cost of $1 million. it sold the rights to the initial showing to a network for $1 million, and fully expected to sell the rights for a repeat showing the following year for $300,000. it thought that in future years, additional returns would generate at least another $300,000 of revenue. Disregarding any GAAP dealing with this issue, how much should the company report as cost of sales for the first year? would the answer be different if in the first year the producing company agreed to pay $100,000 for advertising and promoting the initial showing?

Reference no: EM132386412

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