Beach Life Ltd. operates an online booking service restricted to beachfront properties around the world. Users of the co

[answerhappygod]

Beach Life Ltd. operates an online booking service restricted to
beachfront properties around the world. Users of the company’s
website booked beach rentals totalling $7,990,000 in 2020.
Bookings are fully paid for at the time of reservation and are 50%
refundable if the reservation is cancelled any time up to 21 days
before the reservation date. After that date, the reservations are
non-cancellable.

Under the terms of the company’s listing agreements with property
owners, Beach Life charges a fee of 10% of the total
reservation and electronically transfers the balance of cash
collected directly to the property owner’s bank five days before
the reservation date.

Of the 2020 bookings, 90% had been completed before Beach Life’s
December 31 year end. The balance was still within the cancellation
period.

(a1) Determine how much revenue Beach Life
would be able to recognize in 2020.