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Question 1: Determine the date which the company recognizes the revenue under the accrual-basis accounting.
1) American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs on August 16.
2) A customer purchases sunglasses from Eddie Bauer on January 27 on account. Eddie Bauer receives payment from the customer on February 2.
3) On March 30, a customer preorders 10 pizzas (without onions) from Pizza Hut for a birthday party. The pizzas are prepared and delivered on April 2. The company receives cash at the time of delivery.
4) A customer pays in advance for a three month subscription to Sports Illustrated on July 1. Issues are scheduled for delivery each week from July 1 through September 30.
The only options are these dates:
January 27
February 2
March 30
April 2
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Computation of Free Cash Flow
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