Adopt the revised revenue standard

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Question 1. River Rocks, Inc. is a private company with a calendar year-end that was formed in 2015. The company must determine when and how it should adopt the revised revenue standard.

- In what period should River Rocks have first applied ASC 606-10?

- How should the standard be initially applied (prospectively, retrospectively)? Explain (and cite the authority).

Question 2. An employer offers each of its 50 employees 20 vacation days per year. As of January 31, no employees have taken a vacation; however, each employee has earned 1.5 days. Vacation days that are unused at the end of the year may be carried forward to the following year. The employer encourages employees to use their full vacation allotment and thus does not anticipate forfeitures. Must the employer record a liability for the employees' vacation days earned on the January 31 financial statements? Be sure to cite the authority for your conclusion.

Reference no: EM133306619

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