Detailed Answer
(b) Generally, sales revenue is recognized at the date of
delivery, because that generally is the time at which a sale has
occurred. At that point the two criteria for revenue recognition
were met; the revenue is (1) realized or realizable and (2) it is
earned (SFAC 6). Therefore, the amount of sales revenue recognized
in year 1 is $150,000 (50,000 × $3 = $150,000).
