Case 2: Revenue Recognition: (1) Revenue should be recognized only when all of the following four criteria have been met (ASC 605-10-99) 1) Persuasive evidence of an arrangement exists: Customers of Stella co. place a verbal order over the phone or send an email to the sales representative. The final agreement is signed and authorized after about 7 months. Since a written agreement is considered to be persuasive rather than a verbal one, Stella Co. can recognize the sales only after 7 months when
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cm3 = 127, 500, 000 tablets d) To find out how many truckloads of product are required to carry $10 million of product, we need to calculate the revenue from one tablet without mark-up for Distributor as well as wholesaler margin. X + 4X + 0.35X = 2.83 1X+ 4X + 0.35X = 2.83 5X + 0.35X = 2.83 5.35X = 2.83 X= 0.52 e) The revenue from all tablets that could fit into a trailer is: 127, 500, 000 X 0, 52 = 66, 300, 000 f) How many truckloads of product are required to carry
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Case 19-9: Institutional Investor Company Investment existence and valuation Succint: Institutional Investor Company (IIC) is a for-profit conglomerate consisting of multiple business lines operating in a variety of industries throughout the United States. IIC is being audited under audit standards established by the AICPA. IIC is highly profitable and manages an investment portfolio of approximately $500 million that is used to fund operations as needed. Management
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Module 8: Problem 1. Hartman, Inc. has prepared the following comparative balance sheets for 2012 and 2013: | | |2013 |2012 | | |Cash |$ 287,000 |$ 153,000 | | |Accounts receivable |149,000 |117,000 | | |Inventory
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Tihut Elias March 11 2014 Ms. Wallace Oromo Tribe How would you feel if you had to live in a house made entirely of cow poop (also known as dung), straw, and mud? Well if you live in most of the tribal areas of Ethiopia you would have had to do just that. Well for now I am focusing on the Oromo tribe, and this is what I have to say. The Oromo people live in the Oromo and tigray areas as well as in Kenya(which part of Ethiopia is Oromo and Tigray regions?) But the Oromo people were originally
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1820‐100, Revenue Recognition (Topic 605) – Revenue from Contracts with Customers Dear Technical Director: Ameriprise Financial, Inc., one of the nation’s leading financial planning, asset management and insurance companies, appreciates the opportunity to offer comments with respect to the Proposed Accounting Standards Update, Revenue Recognition (Topic 605) – Revenue from Contracts with Customers (the “Proposed Statement”). We support the FASB’s efforts to develop a single revenue recognition
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common usage. And revenue recognition principle is one of the accounting principle and it is an important cornerstone of accrual accounting along with the matching principle. For the revenue recognition principle, the accounting guidelines demand that revenues is to be recorded on the company financial statement when the product delivery or service completion, without regard to the timing of cash flow. So, the company no need to wait until cash is received before they recognize revenue. For instance
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draft on revenue recognition, the basic revenue recognition principle and model have not changed from the original proposal – i.e. an entity must recognize revenue when it transfers promised goods and services to the customer and the amount recognized should be the consideration to which the entity expects to be entitled. In current practice IFRS and US GAAP standards on revenue recognition differ but under ED they would essentially converge. Entities would apply a 5-step revenue recognition model and
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company will undergo a Security Exchange Commission (SEC) investigation for revenue recognition related to the 2011 fiscal year. As a publicly traded firm, MDC is legally bound to comply with all aspects and requests during the course of the investigation. All financial, proprietary information and operations data will be subject to review and should be submitted timely. The investigation will focus on revenue recognition timing. The annual audits performed by several contracted accounting firms
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CHAPTER 18 REVENUE RECOGNITION MULTIPLE CHOICE—Conceptual AnswerNo.Description c1.Revenue recognition principle. b2.Definition of "realized." a3.Definition of "earned." d4.Recognizing revenue at point of sale. d5.Recording sales when right of return exists. c6.Revenue recognition when right of return exists. d7.Revenue recognition when right of return exists. b8.Appropriate accounting method for long-term contracts. c9.Percentage-of-completion method
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