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Question: (Recognition of Revenue-Bonus Dollars) Griseta & Dubel Inc. was formed early this year to sell merchandise credits to merchants who distribute the credits free to their customers. For example, customers can earn additional credits based on the dollars they spend with a merchant (e.g., airlines and hotels). Accounts for accumulating the credits and catalogs illustrating the merchandise for which the credits may be exchanged are maintained online. Centers with inventories of merchandise premiums have been established for redemption of the credits. Merchants may not return unused credits to Griseta & Dubel. The following schedule expresses Griseta & Dubel's expectations as to percentages of a normal month's activity that will be attained. For this purpose, a "normal month's activity" is defined as the level of operations expected when expansion of activities ceases or tapers off to a stable rate. The company expects that this level will be attained in the third year and that sales of credits will average $6,000,000 per month throughout the third year.
Griseta & Dubel plans to adopt an annual closing date at the end of each 12 months of operation. Instructions
(a) Discuss the factors to be considered in determining when revenue should be recognized in measuring the income of a business enterprise.
(b) Discuss the accounting alternatives that should be considered by Griseta & Dubel Inc. for the recognition of its revenues and related expenses.
(c) For each accounting alternative discussed in (b), give balance sheet accounts that should be used and indicate how each should be classified.
The amount of the compensation will be less than the fair value of the plant, but more than its book value. How should the contingency be reported in the financial statements of Shinobi Inc.?
Prepare an amortization schedule for the loan repayment; and (b) explain why the interest is declining over the loan period.
what is the journal entry foron june 30 2010 exchanged a display case placed in service on june 1 2003 original cost
the stockholders equity of verkovsky company at the beginning and end of 2012 totaled 21000 and 23000 respectively.
ACC20013: Company Accounting Assessment: Financial statements and Consolidations. Prepare appropriate statutory financial statements for any ONE of the companies on the list. Notes to statements are not required, but may be included if deemed neces..
The accounting staff of Lambert Company has assembled the following information for the year ended December 31, 2015: Prepare a statement of cash flows. Use the direct method of reporting cash flows from operating activities
The introduction of a new management accounting system is MOST likely to motivate UNWANTED employee behavior when it is used for:
Why is an uncollectible account recorded as an expense rather than a reduction in revenue?
Explain what you think about the argument. Describe several points with which you agree or disagree. Explain how the passages support your opinion.
Why are consumers and the public generally more concerned with ethical and socially responsible business behavior today than they were, say, fifty years ago?
Everly Corporation acquires a coal mine at a cost of $408,400. Intangible development costs total $102,100. After extraction has occurred, Everly must restore the property.
What would have been Dominion's journal entry to reflect the fair value of the investments?
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