Reference no: EM132461384

Question problem 1: During the year, the company signed contracts to sell optical products which included software. Before year end, the company shipped out what it called an "interim product solution"-in other words, the optical product ordered by the company was not yet ready in its final form so the company shipped a beta or draft version of it. This interim product would then be followed shortly by the final version. Revenues were recognized upon shipment of the interim product solution as it was felt that the final version just needed minor refinements. The customers generally paid more than half of what was owed under the contract when they received the interim product solution. It was rare that customers backed out of this type of contract for any reason.