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Question - Consulting Company had the following transactions in October. The company has a monthly accounting period and uses the ACCRUAL method.
Transaction #1 Company received $40,000 in cash for a 5-month consulting contract. The services will be provided evenly, beginning in October.
Transaction #2 Company provided $112,000 of consulting services on credit.
Transaction #3 Company collected $60,000 of cash on the consulting services provided in transaction #2.
Required - What does the company report as revenue for the month of October?
Calculate the activity-based costs and profits for each contract.
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