Reference no: EM132776375

Problem 1: ABC Co. produces a wide variety of frozen foods. Due to the faltering economy, ABC closed its provincial sales outlets. Instead, ABC outsourced various distributors to sell its products. Each distributor accepting delivery shall pay ABC 10% of the factory selling price of the goods delivered and accepted. However, if the distributor fails to sell all of the goods accepted before their expiration dates, ABC is obligated to repurchase the unsold goods. In June 20x1, ABC delivered goods with total factory selling price of ?10,000,000 to its distributors. ABC received 10% of the total factory selling price of the goods delivered. When should ABC recognize revenue from the goods delivered?

a. When the goods are shipped to the distributor.

b. When the goods are sold to the ultimate customers.

c. When the distributor pays ABC Co.

d. When ABC receives the 10% of the total factory selling price of the goods delivered.