The next two questions use the following data from TGX Global, a heavy equipment manufacturer (this information will be repeated on the next question): TGX Global sells excavators, with an average sale price of $500,000 per excavator. TGX received new orders for 90 excavators in 2018. TGX produced & delivered 120 excavators in 2018: 50 excavators were ordered in 2017 and the rest (70 excavators) were ordered in 2018. TGX received payment for 110 excavators. TGX began selling 1-year maintenance services contracts for $50,000 per excavator in 2018, which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders made in 2018 (no contracts were sold on orders placed in 2017). Assume all excavators delivered in 2018 are delivered at year end, calculate TGX’s 2018 revenue based on the transactions described above.

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03-08-2021
Business

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The next two questions use the following data from TGX Global, a heavy equipment manufacturer (this information will be repeated on the next question): TGX Global sells excavators, with an average sale price of $500,000 per excavator. TGX received new orders for 90 excavators in 2018. TGX produced & delivered 120 excavators in 2018: 50 excavators were ordered in 2017 and the rest (70 excavators) were ordered in 2018. TGX received payment for 110 excavators. TGX began selling 1-year maintenance services contracts for $50,000 per excavator in 2018, which begin after the excavator is delivered. Contracts were sold on 50% of all excavator orders made in 2018 (no contracts were sold on orders placed in 2017). Assume all excavators delivered in 2018 are delivered at year end, calculate TGX’s 2018 revenue based on the transactions described above.

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andromache andromache · Answer 1 · 2021-08-10T10:54:58+02:00

TGX’s 2018 revenue depends upon the given transactions is $60 million.

The calculation of TGX’s 2018 revenue depends upon the given transactions is as follows:

TGX’s 2018 Revenue is

= TGX produced & delivered excavators in the year 2018 × Sale Price per excavator

= 120 Excavator × $500,000

= $60 Millions.

Working Notes:

1. The revenue for the year 2018 should be recorded at that time period where the products are sold.

2. The revenue for the maintenance service contract should be recorded in the year when the service is provided not in that year where the contract service should be sold as it is treated as the unearned revenue till the service is provided

Therefore we can conclude that TGX’s 2018 revenue depends upon the given transactions is $60 million

Learn more about the revenue here: brainly.com/question/19682087