Question

Your audit firm has a new client in the cable television industry. The audit partner, Dan, asked you to find out whether the client can recognize revenue (under currently effective revenue guidance) immediately for hookup services provided to new customers. Assume that the client's hookup revenues generally approximate $75 per customer, and related direct selling costs generally amount to approximately $10 per customer. Draft an email to Dan, responding to the question.

Answer 1

Subject: Recognizing revenue for hookup services provided to new customers.

Dear Dan,

This is in reference to the query that you possess regarding the new client about recognizing revenue for hookup services that are provided to new customers. I have had a conversation with the client and he has actually provided me with all the details I hope these details may actually help you get the answers to your queries regarding the client. The hookup revenues are generally $75 per customer and there is also a direct selling cost related to each transaction that amounts to $10 per customer he has also conveyed that the values provided are approximate values to some extent but can be used in any cause.

I hope that I am able to contribute to resolving your queries, please feel free to reach out to me in case of any further queries that you may have regarding the client.

Thanks

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