Identify the change of control indicator

Reference no: EM132701950

Question - For each of these scenarios:

How contingent liabilities and/or transfer of control considerations would be recorded, if any exist.

Identify the change of control indicator for when revenues should be recorded.

1) Trendy Taxes has filed tax documents for the Smiths. The firm required the Smiths to pay an upfront fee of $100 that is related to the preparation services. The Smiths are also obligated to pay 5% of their $11,000 income tax return. The Smiths have not yet received their income tax return.

2) Apple is holding a presale for the IPhone 12. Customers can purchase the phone two months before it comes out for a slightly discounted rate of $899. For $20 more, the customer can add a warranty ensuring that they will get a full refund if they decide they no longer want the product. If choose not to add the warranty, the customer can sell back the phone for a 50% deduction.

3) Boulder Swim Company offers two options for memberships at their pool/spa. The first option is to pay a $100 fee upfront, and pay $5 per visit/class for a year. The second is to pay $300 upfront, and have unlimited classes/entries for the year.

4) A vintage store, Old Souls, received a shipment of 10 antiques from a private collector all priced at $500. The collector states that any items sold in the first three months will have a 15% commission. After three months, commission will be 5.5%. It is now the end of three months, and Old Souls has sold six of the items (two items each month).

5) Glowed Up, an online makeup company, is being sued for $5,000 for selling damaged goods to a high-volume customer. They have a refund/exchange policy, but do not accept damaged goods. Glowed Up also claims that the damage happened in transit, and they have a FOB shipping point policy. Despite Glowed Up's policies, their lawyer says that the chances of them losing the suit is not likely, but still possible.

Reference no: EM132701950

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