1. According to the case, I think the big problem is the revenue recognition date. 2. Alternative 1, exclusive negotiation payment ($1 million) should be recognized on December 1, 2009 because it paid on that day. Contract signing payment ($2 million) should be recognized on January 1, 2010 because SolvGen and Careway also entered into a five-year license and distribution agreement dated January 1, 2010. Instrument system Version 1 ($5 million) should be recognized when of instrument system
Words: 703 - Pages: 3
Lefkofsky who had built several businesses around call centers and the Internet. In 2006, Lefkofsky became interested in an idea of Mason’s for a website that would act as a social media platform to bring people together with a common interest in some problem—most often some sort of social cause. Lefkofsky provided Mason with $1 million of capital to develop the concept that became known as “The Point.” Virtually no one associated with The Point initially envisioned commercial aspirations for the venture
Words: 4394 - Pages: 18
corporate annual report. The balance sheet shows the financial position—assets, liabilities, and stockholders' equity—of the firm on a particular date, such as the end of a quarter or a year. The income statement presents the results of operations—revenues, expenses, net profit or loss and net profit or loss per share—for the accounting period. The statement of shareholders' equity reconciles the beginning and ending balances of all accounts that appear in the shareholders' equity section of the balance
Words: 1334 - Pages: 6
Professor Ritsma 5/14/02 #79 Edvid, Inc. Analyzing Edvid’s situation with the 7-step ethical decision-making process: Facts: • Edvid wants to use the Modified Operating Method for accounting for its revenue. • Hutton wants to use Profit Recognition – New Method for accounting for Edvid’s revenue. • Edvid justifies their position with SFAS No. 48 & 53. • Hutton felt that neither SFAS No. 48 or 53 applied to Edvid’s position. Operational Issues: • Edvid is showing its lack of
Words: 1601 - Pages: 7
In today’s turbulent economy we know that revenues are needed to keep the world operating. Revenues are a vital part of our economic system. Without generated sales of goods and services there would not be any revenue. As we all have heard in the news lately that the security exchange commission is planning on switching U.S. companies accounting principles to international financial reporting standards. What this mean is that we will no longer operate our business sector the way things use to
Words: 808 - Pages: 4
Equipment Systems, Mr. Reed sees an opportunity to end the year with higher revenue than originally expected. The problem is that the customer has a stated contingency that the product is not delivered until January 11, 2011 as they do not have enough space in their warehouse to accommodate such a large order. Mr. Reed wants to be able to record this sale for the year ending 2010. This would violate the revenue recognition principle according to GAAP guidelines and would be looked at as an earnings
Words: 1437 - Pages: 6
business ethics of an accounting manager ordering one of his accountants to falsifying a company’s accounting ledger. The Generally Accepted Accounting Principle of expense recognition was not followed. The accounting manager was attempting to commit fraud for personal gain, he does this by manipulating the books to show higher revenue in order to meet the volume for management bonus. The accounting manager also created a hostile working environment by threating his accountant’s job security if he didn’t
Words: 1055 - Pages: 5
and higher class of people in China which they have quite a big amount of money to spend on purchasing the Disney products and also travelling such as Disneyland. Sooner or later China will be on of the biggest driving forces in forms of profit and revenue. China is now moving quickly towards a country that has the economic freedoms and the closer it comes to then the sooner a massive market will emerge. For example, Shanghai has strong distribution power in the China; it is capture the latest trends
Words: 942 - Pages: 4
uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc vbnmqwertyuiopasdfghjklzxcvbnmrty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc Avoiding Gain While Transferring Property and Liability to a Controlled Corporation Summary Internal Revenue Code (IRC) Section 357(a)1 provides that when property is transferred to a controlled corporation in a transaction that qualifies under Section 351 2, and the property transferred has a liability attached to it, the liability assumed by the corporation
Words: 1737 - Pages: 7
during their meeting, warning them of what could happen if their illegal procedures were noticed; such as pay a large fine or serve jail time. However, after having the meeting if the senior executives seems not to care or take action to correct the problem; I would then advise the caller to secretly collect information that could prove her company’s illegal practices according to the General Accepted Accounting Principles (GAAP), such as the company’s journal ledger and relevant financial statements
Words: 2050 - Pages: 9
