...a wifey So, me no trust no buddy, no buddy Heard them niggas wanna roll on me Roll on me But me no have worry, no worries Cause they no catch no buddy, no buddy [Verse 1] Yo, trusting droppers ain't healthy I always ask who she with when she bells me A yo, this chick's tryna chill and take selfies But if them other hoes see Lord help me Blud, it's like one week they hate me But then the next week they love me But both weeks I get money I give a fuck about all you Blud, I got fam I don't talk to No Hello's, we just walk through Fake niggas make me paranoid Frenemies moving fucked up You know I ride if I love ya' I'll shoot a friend for a brother I'll shoot my dad for my mama It sounds mad, but it's so true Real Recognize Real and I don't know you He thinks he's bad cause he's gold tooth Them man are shook of my mad crew My niggas still, like statues Said she wants to marry Jewan And die in designer Babe I don't trust but I like ya' He don't bang guns He's a liar, I've always been a rider Cause I'm a real deal signer A yo, I really need a lady I want a night with Paigey Cakey I like your style girl, you're wavey Ay bro, I really wanna holla that But lightskin girls don't follow back I need views like Hollowman I'm kick scaring my bud, bud Look around bro, it's just us We been a nigga since the younger Fam I don't trust, but I have one Go suck your dad, like your mum done I know these bitches love Sosa But how the fuck are they forgetting...
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...Under the new revenue recognition guidance at ASC 606-05-4, an entity recognizes revenue in accordance with the five-step process. This guidance provides financial statement users with more information regarding the nature, timing, and extent of revenue from contracts with customers and requires more stringent disclosures to enable the end user to develop a thorough understanding of the process. This requires the company to identify a contract with a customer, identify the specific performance obligations, and determine the agreed upon transaction price for the contract. Next, the entity must allocate the agreed upon transaction price to the performance obligations expressed in the contract, including any discounts offered. Finally, the company...
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...CHAPTER 18 Revenue Recognition – 2014 Update ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics | Questions | Brief Exercises | Exercises | Problems | Concepts for Analysis | 1. Current Environment; 5-Step Model. | 1, 2, 3, 4, 5, 6 | | | 8 | 1, 2, 3 | 2. Contracts; Contract modifications. | 7, 9 | 1, 3 | 1, 2, 3, 4, 17, 18 | 1, 2 | 1 | 3. Performance Obligations | 10, 11, 12 | 3, 4, 19, 20 | | | | 4. Transaction Price | 8, 13 | | 5, 8, 9 | 4, 5 | 1 | 5. Variable Consideration; Time value; Non-Cash consideration, consideration paid to customer | 8, 14, 15, 16, 17, 18, | 5, 6, 7, 8, 9, 10 | 6, 7 | 3, 4, 6, 7, 8, 9 | 5 | 6. Allocate transaction price to performance obligations. | 11, 12, 19, 20 | 2, 8, 11, 12 | 5, 8, 9, 10 | 1, 2, 3, 4, 5 | | 7. Satisfying Performance Obligations – transfer control: Returns; repurchases; Bill and Hold; Principal-agent; consignments; Warranties; Upfront fees. | 5, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30 | 13, 14, 15, 16, 17, 18, 20 | 10, 11, 12, 13, 14, 15, 16 | 1, 2, 3, 5, 6, 7, 8, 9 | 2, 3, 4, 6, 7 | 8. Presentation, Contract Costs, Collectability. | 30, 31, 32, 33 | 19 | 17, 18, 19, 20 | | 1, 2, 6 | *9. Long-Term Contracts | 34, 35, 36, 37 | 21, 22, 23 | 21, 22, 23, 24, 25 | 10, 11, 12 | 8 | *10. Franchising. | 38 | 24 | 26, 27 | 13 | | *Material is in the Appendices. ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE) Learning...
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...450 centimeters 2.5m = 250 centimeters To calculate volume b. Volume of a rectangular prism = a x b x c Volume= 1,700 x 450 x 250 Volume = 191,250,000 cm3 c. To find out how many Wellbutrin XL tablets fit into a trailer 1.5x=191,250,000 X=127,500,000 d. How much revenue does Biovail get from a single pill ? 400% 35% $2.83 Biovail → Distributor → Wholesaler → Retailer 0.52 ← 2.10 / 400% ← 2.83/1.35%=2.10 127,500,000 x 0.52= $6,630,000 One truck can definately carry $10 million worth of Wellbutrin XL tablet product. 2. How should the company recognize revenue based upon the two possible FOB contract structures mentioned in the case? Since Biovail’s stock is publically owned it needs to file its financial statements with the SEC. The SEC requires that it abide by GAAP. GAAP requires that revenue be recognized when it is earned or realized. Meaning that the company has done everything it is supposed to do; which would include shipment. So Biovail should recognize revenue once its products have reached the Distributor’s FOB. 3. How does the accident affect the stated revenues under different FOB contract structures? Explain your reasoning? If Biovail...
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...your own words, define “revenues.” Explain how revenues are different from “gains.” Revenues are the monies that are brought in as a result of the business’ core functions in their respective industry. Revenues are different from gains in that revenues can be accounted for, while still taking a loss in the overall profitability. If an item were to be sold below cost, it brings revenue (selling price), but was sold at a loss. B. Describe what it means for a business to “recognize revenues.” What specific amounts and financial statements are affected by the process of revenue recognition? Describe the revenue recognition criteria outline in the FASB’s statement of Concepts No. 5. A business can decide at what time they recognize their revenues. Revenues can be accounted for at the point of sale, or after Goods have been delivered (are out of inventory). Accounts that are affected are inventory, Accounts receivable, cash, and uncollected revenue. Financial statements affected include the Income statement and Balance sheet. The revenue recognition process is a cornerstone of accrual method of accounting. According to the FASB, revenues are recognized when they are realized and are earned when goods are transferred no matter when cash is received. C. Refer to the Revenue Recognition discussion in Note 1. In general, when does Apple recognize revenue? Explain Apple’s four revenue recognition criteria. Do they appear to be aligned with the revenue recognition criteria you...
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...cards expire on November 1 of the current year and cannot be redeemed for cash. The main issues involved in this situation are when to recognize the revenue associated with the gift cards and how to record the transaction. These issues are addressed by multiple sections of GAAP, including the following: * ASC 605-50-20 * ASC 605-50-25 * ASC 405-40-30 * ASC 460-10-25 According to ASC 605-50-25-7, a vendor may offer a customer a rebate or refund or a specified amount of cash consideration that is redeemable only if the customer completes a specified cumulative level of revenue transactions for a specified time period. Cash consideration, as defined in ASC 605-50-20, includes cash payments and credits that the customer can apply against trade amounts owed to the vendor. In this situation, USSR is offering its customers a specified amount of cash consideration in the form of gift cards, which are only redeemable if the customer spends over $100 during the month of August. ASC 605-50-25-7 also specifies that the vendor – USSR – shall recognize the refund obligation as a reduction of revenue based on a systematic and rational allocation of the cost of honoring refunds earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the refund. The amount of revenue reduction the company should realize should be based on the estimated number of customers that will likely earn and claim the rebates or refunds...
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...Point of sale: Revenue is recognized the moment goods are sold and shipped to the customer FOB shipping point or when the goods are received by the customer if it is FOB destination. Completion-of-production:Companies recognize revenue when these metals are mined or agricultural crops harvested because the sales price is reasonably assured, the units are interchangeable, and no significant costs are involved in distributing the product Percentage-of-completion method: Companies recognize revenues and gross profits each period based upon the progress of the construction—that is, the percentage of completion. The company accumulates construction costs plus gross profit earned to date in an inventory account (Construction in Process), and it accumulates progress billings in a contra inventory account (Billings on Construction in Process). Installment-sales: Recognizes income in the periods of collection rather than in the period of sale. The logic underlying this method is that when there is no reasonable approach for estimating the degree of collectibility, companies should not recognize revenue until cash is collected. Pat's Electronics Division Billed and shipped in 2012 | $2,400,000 | Freight billed in 2012 | $70,000 | Commissions paid to Agents (after ship to customer) | 240000 | Warranty Returns as % of Sales | 24000 | Total of revenue | $2,066,000 | Pickle Construction Division Percent complete | Construction Costs incurred to date | $14,140,000 | 27%...
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...2011 year-end financial statements for Granger Paper Company (GPC). GPC is a profitable company that has been in business for many years. It is primarily a manufacturing company that buys wood from timber growers and converts the wood into a variety of paper products. It is a publicly traded company with a reputation as a good corporate citizen. Although GPC has been audited many times in the past by external CPA firms, this is the first year your firm has conducted the audit. GPC’s total revenue for 2011 is $80 million. In examining the revenue for the year, you notice that $3 million of the revenue does not come from GPC’s primary operations (i.e., revenue from sales of paper goods). This $3 million in revenue is labeled as timber revenue in GPC’s books. This strikes you as odd because, generally, GPC buys timber. That is, timber is part of the cost of goods sold for GPC and, as such, is an expense. You ask GPC’s controller, Pat Smith, why GPC is recognizing timber revenue? Pat informs you that GPC began diversifying its operations a few years ago. A natural extension of its business seemed to be growing and selling timber. So, five years ago, GPC bought 10,000 acres of land in Alabama and Mississippi for purposes of growing timber. The land was purchased from a previous timber grower that had recently harvested its timber. Immediately after purchasing the land, GPC planted pine tree seedlings on all 10,000 acres. You ask Pat what is the typical growing time...
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...Accounting for iPhone at Apple Inc. 1. What is subscription accounting? Subscription accounting is a method in which to recognize the revenue and cost of goods sold are evenly divided over a specific period of time. The revenue is deferred into unearned revenue which would be considered as a liability account. This method also deals with the timing of a sale, in which the sale during the middle of the month will still be recognized in the full month. In this case, Apple uses a straight-line basis of 24 months, which is the estimated phone contract period. Apple will collect the cash from the date of the sale, but will be in a deferred account. The portions of the revenue will be recognized evenly throughout the 24 month period. Since the iPhone sends upgrades of the software, this method allows those costs to be estimated throughout the time period. Therefore this method can be considered less bias for the company. 2. Why did Jobs want to provide non-GAAP accounting data? Jobs wanted to provide non-GAAP accounting data because he believed it would “eliminate the impact of subscription accounting.” He boasted that the non-GAAP sales of 2008’s fourth quarter was $4.6 billion, totaling 39% of total revenue. Also, the research showed that investors preferred the non-GAAP data because it was easier to understand Apple’s earning and was easier to compare their data to other competitors. Overall, the non-GAAP data seem to better reflect Apple’s business, and better predicted...
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...is the balance for Total Assets? On which financial statement is it located? A debit balance of $203,105 million in the consolidated balance sheets reprents the total value of assets with the company. • Discuss Note 1 (accounting policies). What is the company’s revenue recognition principle? The Note 1 (accounting polices) states how the various assets and liabilities of the firm are recognized in the financial statements. Also how company recognizes taxes, costs, payments from suppliers, and the revenue recognizing policies. The Revenue Recognition policy is as follows- o Sales The company recognizes sales revenue, net of sales taxes and estimated sales return at the time it sells merchandize to the customer. o Membership fees The company recognizes the membership fee revenue over the term of the membership, which is typically 12 months. This revenue is recorded under Membership and Other Incomes in the Statement of Incomes. The deferred membership fee is included in accrued liabilities in the Balance Sheet. o Shopping Cards Customer purchased shopping cards is not recognized as revenues until the customer for the purchase of merchandize redeems the card. The management recognizes the amount in the unredeemed shopping cards over shopping card historical usage periods based on historical redemption rates. Management periodically...
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...warranty contract? Explain your selection and your reasoning fully. In our opinion, Partial Revenue Recognition approach is most consistent with the actual substance of a sales transaction involving an extended warranty contract. Using partial revenue recognition, the company can recognize partial revenue at the time of sale. We can distinguish between what is earned and what is yet to be earned. At the time of sale, the company recognized a portion of the revenue that they earned on the total sales because the warranty contract is incomplete. It recognizes the rest portion of the sale as deferred revenue and records “over the contract period” (Bruns 3). This method let the sales revenue and liabilities account to average out, which is relatively relevance and faithful representing the financial information. * Full Revenue Recognition approach had low faithful representation. Since the revenue associated with the service of the contract has not yet been completed, which means the revenue had not been earned; therefore, it was less precise to recognize it at the sale. It will understate the liability and overstates sales revenue because this method realizesfull revenue at the point of sale and adjusts later if “actual costs under the service contract fell short” (Bruns 2). Full Revenue Recognition approach will increase the stock price because overstate of sales revenue. * Deferral of revenue method records the product sales and extended warranty separately, it will have a higher...
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...Running head: REVENUE RECOGNITION Revenue Recognition Name: Institution: Course: Tutor: Date: Revenue Recognition Introduction In accounting for revenues an accountant must follow GAAPS guidelines on accounting for revenues. Joy fitness is currently faced with a problem of earning low revenue and wants to seek for a business loan. It is an important requirement for any business to submit all their financial transaction to the financial institutions before the loan is rewarded. Therefore, Joy Fitness must prepare the trading profit and loss account together with other necessary documents for financial institution to consider offering the loan. The amount of loan to be given depends on the amount of returns the company gets or the available assets for an institution to consider their capability to pay. the business owner ask the business accountant to recognize the revenue related to the membership dues, the revenue from the coupon books sold, and the machines that have been sold which is against GAAPS guidelines (Albrecht et al 2011). Violating the GAAP Principles of Revenue Recognition By recognizing the membership due as an income received the business owner will be making a mistake because the income from the fees is normally collected in advance. Also the membership can be refunded if the member cancels out the membership. Therefore the income from the membership fees should only be recognized by the business...
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...CASE 2-1 Revenue and Expense Recognition—Orthodontic Centers of America CASE OBJECTIVES The objective of this case is to evaluate the revenue and expense recognition methods used by the company. INTRODUCTION The following information was extracted from the 1999 and 2000 annual reports of Orthodontic Centers of America [OCA]. The company provides practice management services to orthodontic practices in the United States. OCA acquires and develops orthodontic centers and manages the business operations and marketing aspects of affiliated orthodontic practices. At December 31, 2000, there were 592 orthodontic centers, of which the company developed 306 and acquired 361 (75 were consolidated into another center). The affiliated orthodontists control the orthodontic practices, determine which personnel, including orthodontic assistants, to hire or terminate, and set their own standards of practice in order to promote quality orthodontic care. A typical patient receives an initial consultation and preliminary procedures (teeth impressions, x-rays, and the placing of spacers between the teeth for braces) in advance of the next appointment. The patient signs a contract for treatment in the event the orthodontist recommends orthodontic treatment. Generally, braces are applied two weeks later and subsequent adjustments to the braces are made every four to eight weeks. The contract specifies the terms and the length of the treatment as well as the total fees. The average contract length...
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...The last scenario is to resolve revenue from a non-refundable prepayment for the right to receive goods or services in the future, such as a gift card in this case (IFRS 15 BC396). According to IFRS 15.B44, UCL should recognize a contract liability in the amount of the prepayment for its performance obligation to transfer in the future. UCL shall derecognize that contract liability (and recognize revenue) when it transfers those goods or services and, therefore, satisfies its performance obligation. As the gift cards have no expire date, UCL will only recognize revenue when those gift cards are redeemed (IFRS 15.B40), because the related performance obligations has been satisfied. Customers may not always exercise their contractual rights to redeem the gift cards in full....
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...JOAN HOLTZ (A)* (1) Electric utility bills. An electric utility company can estimate with reasonable certainty the expected revenue in a given period by taking into consideration some of the following: customer habits, average historical trends, demand and supply forecasts, and environmental changes. The electric utility industry effectively uses an insurance industry concept—the law of large numbers, to determine with certainty, expected revenue. The law of large numbers states, as the number of participants (customers) in a risk class (low, medium, high kilowatt users) increases, the expected outcome (usage for specific class) remains the same but the standard deviation (variability of usage) continues to drop until the probability that the average outcome (average usage) will be different from the expected outcome (expected usage) becomes negligible. This concept is conceptually similar to the Central Limit Theorem, and thus illustrates on average, the more observations per class, the more the usage tends to be bell-shaped and this usage is used for basing revenues per class. This is one way how the utility company can determine period-end revenue. Another way is if customer usage is consistent from period to period it can base reported revenue on actual meter readings. The unreported usage in December would be reported in January, and overall revenues for this year would not be materially misstated. The utility company can also adjust for seasonal changes in demand (i.e less...
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