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Johnson sells $112,000 of product to Robbins, and also purchases $12,400 of advertising services from Robbins. The advertising services have a fair value of $9,200. Johnson should record revenue on its sale of product to Robbins of:________.A- $108,800B- $112,000C- $102,800D- $99,600

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Answer:

The answer is A. $108,800

Explanation:

Fair value of advertising service is less than its purchase price. Johnson is paying moor than normal.

We need to find the difference between the fair value and its purchase price. The difference is $3,200($12,400 - $9,200)

This $3,200 is a refund as part of $112,00.

Therefore, Johnson records a revenue of $108,800($112,000 - $3,200)

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