Introduction Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. My report will contain the answers to the following questions: 1. Construct Brandywine’s 2007 income statement. 2. What were Brandywine’s 2007 net income, total profit margin
Words: 457 - Pages: 2
of sales transactions involving equipment and an extended warranty contract. Revenue from warranty has to be recognized when a period of a warranty is fulfilled. It would be wrong to consider revenue from the sale of an extended warranty or product maintenance contract at the time of sale since the company is still liable or obliged to the customers with the warranty. All are major elements of Partial Revenue Recognition on the sale of extended warranty and product maintenance contracts were applied
Words: 369 - Pages: 2
4011 APRIL 7, 2009 CRAIG CHAPMAN Biovail Corporation: Revenue Recognition and FOB Sales Accounting Background Late on October 9, 2003, David Maris, an analyst at Banc of America Securities (BAS), was trying to interpret the shocking events of the previous few days and finish the write-up of his first report on the Canadian pharmaceutical firm, Biovail Corporation. Maris didn’t like what he saw at the company, but he never liked writing “Sell” recommendations. In any event, he wanted
Words: 4152 - Pages: 17
John M. Olin School of Business ACCOUNTING 3610 - FALL 2008 INTERMEDIATE FINANCIAL ACCOUNTING THEORY I EXAM # 1 (100 Points) There are a total of 100 points on this exam. There are five problems, and the total amount of points allocated to each problem is as follows: Points Earned Problem 1 – 20 Points _______ Problem 2 – 30 Points _______ Problem 3 – 25 Points _______
Words: 4415 - Pages: 18
Limited (DCDL) has elected to report under the constraints of IFRS, although they could have elected ASPE as their reporting standards, since they are a private company. DCDL is a company with 40 dry cleaning stores in southern Ontario. DCDL has revenues of approximately $7 Million. DCDL has arranged for a $2,000,000 loan for the purchase of some new equipment for the business. The covenants of the new loan are as follows: * Maximum 2-to-1 debt-to-equity ratio * Minimum cash balance of $500
Words: 939 - Pages: 4
over the selection and application of accounting principles generally accepted in the United States (“GAAP”) related to revenue recognition and restricted cash.” (Bridgepoint Education (BPI) to Restate 2013 Financial Statements). The error that occurred in the financial statements for the year ended December 31, 2013 is an error in analyzing the collectability criterion for revenue
Words: 788 - Pages: 4
the one best answer. 1. The primary accounting standard-setting body in the United States is the a. Securities and Exchange Commission. b. Internal Revenue Service. c. Financial Accounting Standards Board. d. Corporate Board of Directors. 2. An increase in an expense a. increases revenues. b. increases assets. c. decreases liabilities. d. decreases capital. 3. A corporation with total owners’ equity of $85,000 paid a $5,000
Words: 1882 - Pages: 8
Case Analysis Intermediate Accounting A Series of Revenue Recognition Research Cases Using the Codification Case One: Consumer Cleaning Products Corporation (CCPC) Case Two: Landline Corporation Case Three: Assembly Lines Incorporated (ALI) Submitted By Chen Chongxiao Sweta Shah Xiaoyun zhang Case One Requirement 1: The accounting issue in this case is how to account for the coupons which was introduced on Sep. 1 2009 for the new detergent Fresh & Bright Marketing campaign by a detergent
Words: 3268 - Pages: 14
Analysis of Issue 1: What is the accounting issue(s) and the relevant components of the authoritative literature? The accounting issues relevant to the case of CCPC is the correct recognition of coupons related to sales of detergant. Relevant components of the authoritative literature include revenue recognition and the recognition of customer payments and incentives. Analysis of issue 2: When should CCPC recognize the effects of the Fresh
Words: 988 - Pages: 4
Landline Should Go For Net Revenue The accounting issue at hand in this case is revenue. Landline is offering call routing services for PRU and the former entity has to make some receipts from the services rendered. To put the issue at hand in context, revenue is generally the income received by any company from selling goods or services. In abroad sense, revenue is the income received by any commercial institution for the goods sold or services rendered. It is basically the incoming receipts generated
Words: 663 - Pages: 3
