| Course | AC300 Intermediate Accounting I |
|---|---|
| Unit | Unit 10 |
| Paper type | Revenue recognition analysis |
| Length | About 550 words, 4 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC300 Unit 10
A $144,000 Contract Is Not $144,000 of Revenue on Signing Day: A Unit 10 Five-Step Analysis of a Dental Scanner Sale
[Student Name]
Purdue University Global
AC300: Intermediate Accounting I
Unit 10 Revenue Recognition Analysis
[Instructor Name]
[Date]
Brightline Dental Imaging, its customer and all figures are composite; the standards and textbook cited are real.
Step 1: Identify the Contract
On November 3, Brightline and a four-dentist practice signed a written agreement with approved terms, identified rights and payment terms, and the practice has the ability and intention to pay. Collection is probable. A contract exists (Financial Accounting Standards Board, 2014).
Step 2: Identify the Performance Obligations
1. The scanner. The practice can benefit from it with installation available from other qualified technicians, and handing it over is a promise that stands apart from the setup work. Distinct.
2. Installation and calibration. Several independent firms perform it, and it does not significantly modify the scanner. Distinct.
3. Two years of software updates and technical support. A series of distinct monthly services provided in the same pattern. One performance obligation satisfied over time.
Judging whether installation is distinct follows the guidance on whether the setup work changes or merely accompanies the scanner (Financial Accounting Standards Board, 2016).
Step 3: Determine the Transaction Price
$144,000, fixed. Payment terms: 30 percent at signing, 60 percent on completion of installation and 10 percent 90 days later. Every payment lands inside twelve months, so the price needs no adjustment for financing.
Step 4: Allocate by Standalone Selling Prices
Standalone selling prices from Brightline's separate sales: scanner $120,000; installation $8,000; support $32,000. Total $160,000. The $16,000 discount is allocated proportionally, 10 percent to each.
1. Scanner: $120,000 times $144,000 over $160,000 equals $108,000.
2. Installation: $8,000 times 0.9 equals $7,200.
3. Support: $32,000 times 0.9 equals $28,800, or $1,200 a month.
Allocating the discount across all three promises, rather than recognizing the full $120,000 list price for the scanner, keeps Brightline from pulling into November revenue that belongs to two years of support.
Step 5: Recognize Revenue as Each Obligation Is Satisfied
1. Scanner: control passes on delivery, November 20, when the practice takes title and physical possession. Revenue $108,000 in November.
2. Installation: completed December 2. Revenue $7,200 in December.
3. Support: begins December 2; one month by December 31. Revenue $1,200.
Revenue for the year: $116,400.
Contract Balances at December 31
Cash received: $43,200 at signing and $86,400 at installation, $129,600. Receivable: the final $14,400 is due on March 2 with no condition other than time, so it is a receivable, not a contract asset. Contract liability: $144,000 of consideration received or receivable less $116,400 recognized equals $27,600, the remaining 23 months of support at $1,200.
Entries, Summarized
November 3: Cash, debit $43,200; Contract Liability, credit $43,200. November 20: Contract Liability, debit $43,200; Accounts Receivable, debit $64,800; Revenue, credit $108,000. December 2: Cash, debit $86,400; Accounts Receivable, credit $64,800; Receivable, final payment, debit $14,400; Revenue, credit $7,200; Contract Liability, credit $28,800. December 31: Contract Liability, debit $1,200; Revenue, credit $1,200.
What a Reader Sees
Signing produced no revenue. Delivery produced most of it, and the rest spreads over two years, which is the pattern of what Brightline actually does for the practice (Kieso et al., 2019).
References
Financial Accounting Standards Board. (2014). Revenue from contracts with customers (Topic 606) (Accounting Standards Update No. 2014-09). https://www.fasb.org
Financial Accounting Standards Board. (2016). Revenue from contracts with customers (Topic 606): Identifying performance obligations and licensing (Accounting Standards Update No. 2016-10). https://www.fasb.org
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2019). Intermediate accounting (17th ed.). Wiley.
Reading the AC 300 Unit 10 instructions
The last AC300 unit brings ASC 606 to a single customer agreement, usually one with several goods or services and a price below the sum of their separate prices. Work through the steps in order with a heading for each. Confirm the contract criteria. Decide which promises are distinct, explaining the judgment for any service attached to equipment. Set the transaction price and say whether it includes variable consideration or a financing component. Allocate by standalone selling prices, showing how any discount is spread. Recognize revenue as each obligation is satisfied, at a point in time or over time. Many prompts then ask for contract balances at year end and the entries, so separate receivables from contract liabilities. A closing paragraph on what the revenue pattern tells a reader ties the steps together. Cite the 2014 and 2016 updates in APA 7.
How the AC 300 Unit 10 example is put together
The sample uses five headings, one per step. Step 1 confirms the November 3 contract with a four-dentist practice. Step 2 finds three distinct obligations, explaining that independent firms can install the scanner and that monthly support is a series. Step 3 sets the fixed $144,000 price and notes that payments fall within a year. Step 4 allocates the $16,000 discount evenly at 10 percent across standalone prices of $120,000, $8,000 and $32,000. The highlighted sentence explains why recognizing the scanner's full list price would pull support revenue forward. Step 5 recognizes $108,000 on November 20, $7,200 on December 2 and one month of support. A balances section separates the $14,400 final payment, a receivable because only time must pass, from the $27,600 contract liability. Summarized entries and a reader's view close the analysis.
Where the points sit in the AC300 Unit 10 rubric
Graders in AC300 Unit 10 follow the five steps in order, and each step carries its own points. Identifying the performance obligations correctly is often the largest single item, because an error there changes allocation and timing. The distinctness judgment must be explained, not asserted. Allocation is checked for both method and arithmetic. Timing earns credit only when the transfer of control is tied to a specific event, such as delivery or completion. Contract balances test whether the student understands the difference between a receivable and a contract liability. Entries must reconcile with the recognized revenue. A short explanation of what the pattern means for users shows the purpose of the model. Purdue Global's final units often weigh accuracy and explanation equally. APA 7 references to the revenue updates and the textbook complete the analysis.
AC300 Unit 10 help: mistakes that cost points
The most frequent error in five-step problems is recognizing the full contract price at signing or at delivery. Students also treat installation as part of the equipment without testing distinctness, or split every service into its own obligation when they form a series. The discount is allocated entirely to one item, usually the equipment. Support revenue is recognized when cash arrives instead of as the service is provided. Contract balances are labeled loosely, with unconditional rights to payment called contract assets. Entries are presented without a check that debits equal credits. Some papers list the five steps as a summary and never apply them to the contract's facts. If your contract includes a warranty, a right of return or a bonus for early completion, our team can work the steps with that variable consideration included.
Get an AC300 Unit 10 example written to your instructions
Every promise in the Unit 10 contract matters, so the case should arrive complete: each good or service, any standalone prices, payment timing, discounts or rebates, and the rubric. From those, all five steps are worked with the allocation table and entries in 24-48h. A first custom sample costs nothing. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC300 Unit 10 questions, answered
What if the problem gives no standalone selling prices?
Then they have to be estimated, and ASC 606 names three approaches: adjusted market assessment, expected cost plus a margin, and, in narrow cases, the residual approach. Many AC300 problems supply prices for two obligations and leave the third to be estimated. The sample states which approach it used, shows the inputs, and explains why the residual approach does or does not qualify.
Could installation be combined with the scanner as one obligation?
Yes, in some fact patterns. If installation significantly customized the scanner, or only this company could perform it, the two would form a single obligation recognized when installation finished. The sample's second step tests the facts given and reaches the opposite conclusion, but it names the facts that would change the answer, which is where many graders place their reasoning marks.
Where can I find a free AC300 Unit 10 sample paper?
This page provides a complete AC300 Unit 10 five-step revenue recognition analysis of a composite $144,000 dental scanner contract, with allocation, timing, contract balances, entries and APA 7 references.
Why is the final $14,400 a receivable rather than a contract asset in AC300 Unit 10?
Brightline has already done all it must do to earn that payment, and only the passage of time stands before it is due on March 2. An unconditional right to payment is a receivable.
How is the discount split in the AC300 Unit 10 sample?
The three promises sell separately for $160,000, and the contract price is $144,000. The $16,000 gap is spread in proportion, so each obligation gets 90 percent of its standalone price.