In the month of March, the Digby Corporation received and delivered orders of 159,000 units at a price of $15.00 for revenue of $2.385mil for their product Daft. Digby uses the accrual method of accounting and offers 30 day credit terms. By the end of May Digby had collected payments of $2.385mil for the March deliveries. How
Can you help me with this question? Why is it important to properly recognize revenue when preparing income statements?
Explain how a company's management could overstate revenue to manipulate earning.
In Excel format: (Break-even point) You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units. Using this information, find
Is accrual-basis or cash-basis recognition of revenue more relevant to performance when evaluating the performance of a sales staff?
Revenue on an accrual-accounting basis must be both earned and realized before it is recognized in the income statement. Revenue in cash-basis accounting must be received in cash. Is an accrual-basis or cash-basis recognition of revenue more relevant for evaluating the performance of a sales staff? Why?
List some examples of improper revenue recognition
A company's current sales are $400,000 at a volume of 10,000 units. Fixed costs are $120,000 and variable costs are $30 per unit. What is the company's breakeven sales volume in units? my answer is $3,000 and GAAP requires tha absorption costing be used to prepare internal reports? we have to use ture or false respond. t
Described the underlying conceptual issues concerning revenue recognition when the right of return exists.
If you should examine the proper recognition of revenue in different situations. For instance: In 1981, Statement of Financial Accounting Standard (SFAS) No. 48 standardized revenue recognition, when the right of return exists. Prior to this, AICPA Statement of Position (SOP) 75-1 provided guidance, but was not mandatory. As a
Sullivan Co.'s accounts receivable show the following balances by age: Age of Receivable Balance 0-30 days $600,000 31-60 days 175,000 61-120 days 70,000 more than 120 days 10,000 The credit balance in the allowance for uncollectible accounts is $2,500. Sullivan Co. uses
Please help with the following problem. Elway Company ages its accounts receivable to estimate bad debts for financial statement purposes. President Elway is at a meeting with creditors and needs to know his total accounts receivable balance. Unfortunately, Elway picked up the wrong computer report and has, instead, a summ
The following independent situations require professional judgement for determining when to recognize revenue from the transaction. Identify point of revenue recognition. a). Southwest Airlines sells you an advance-purchase airline ticket in September for your flight home at Christmas. b). Ultimate Electronics sells you a
Markup on all sales is 25%. for example, a retail price of $100.00 means the wholesale price is $80.00 ($80.00 x 1.25 = $100.00). Purchases are recorded at net price. For example, a purchase of a $1,000.00 item on terms of 2/10, net 30 is booked at $980.00 December 31 (Wednesday) 1.) Sold merchandise to the following .
Note for question 2: Received payment from the following customers. The amount shown do not include any discount. You must determine if a discount is appropriate, and if so, how much. Madison Music Store awards partial discounts for payment on account. The sales Amo
This formatted MS Excel spreadsheet contains examples in the area of revenue recognition.
Q: Baxter Land Corporation made a number of sales in 2004 and 2005 that required the use of the instalment method of revenue recognition. The following information regarding the sales is available: 2004 2005 2006 Instalment Sales
CALTRON COMPUTERS, INC. Revenue Recognition for a Computer Hardware Company Caltron Computers, Inc. is a publicly held company with a total market capitalization in excess of $450 million. Caltron manufactures minicomputer systems that are designed to achieve the power of a mainframe at a fraction of the cost. The minico
Problem: Since they no longer play hockey, the Flyers are converting their practice facility into a large senior citizen's complex for a contract price of $5,000,000. This is a three-year project estimated to cost $4,000,000 and the following information is available: (in$ thousands) year1
#1-E) Experience with Revenue Recognition--- Do you have any experience related to revenue recognition? #2-Please read the financial statement analysis case (Merck & Johnson & Johnson) on page 613, Chapter 12. Please read the instructions for (a), (b), and (c) and address the three questions that are asked. Case Merck & J
You have been recently hired as a new auditor for CM Fancy, a major manufacture of gift boxes. The company has been in operation for the past 5 years and has had a good degree of success. The company's primarily sales channel has been through distributors using a dedicated sales force. Now the company has decided to go public t
Describe the process by which standards are set and how this may affect the Statements of Financial Accounting Standards. Regarding revenue recognition.
Supposedly, there is an over 200-year wait to buy GREEN BAY PACKERS season football tickets. The fiscal year-end (when they close their books) for the Green Bay Packers is March 30 of each year. If the Packers sell their season football tickets in February for the coming football season, when should the revenue from those tick
Determine the company's breakeven volume for this book i) in units ii) in dollar sales Develop a breakeven chart for the text Determine the number of copies EAST must sell in order to earn an operating profit of $21,000 on this text Determine the total operating profits at the following sales levels: i) 3,000 units
Why are there so many revenue recognition methods? Why is it so subjective and what are the implications to the quality of the income statement? What are the requirements for items to qualify as irregular items on an income statement?
What types of industries have unearned revenue? Why is unearned revenue considered a liability? When is the unearned revenue recognized in the financial statements?
Judgments about whether revenue should be recognized are among the most contentious that an auditor faces. Following are a number of situations in which the auditor will be required to either acquire additional information or make decisions about the amount of revenue to be recognized. Required: a. Identify the primary criter
For Frantek's current year-end as well as subsequent year-ends, discuss the accounting issues raised by the amendment to the agreement between Frantek and Conte. Include in the discussion: 1) Analyze the relationship between measurement and recognition 2) Explain recognition criteria in the context of this case. 3) A rec
E7: Allied Company produces cow feed that is sold by Grain Foods Company. Swan receives a royalty of 15 percent of sales. Royalties are paid by Grain Foods and received by Allied semiannually on May 1 for sales made July through December of the previous year and on November 1 for sales made January through June of the current ye
I just want to make sure that I am approaching these problems correctly so I will only list one of the three probs. Gina Construction Division During the fiscal year ended November 30,2007, Gina Constgruction Division had one construction project in process. A $30,000,000 contract for construction of a civic center was gra
What approach should be taken to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is?
A Company sells a single product for $20 per unit. If variable expenses are 60% of sales and fixed expenses total $9,600, what would total sales volume have to be in order to achieve net income of $10,000?