On January 1, 2021, Horton pays Damian a refundable deposit of $100,000 and agrees to four installment payments of $375,000. The installment payments are due on March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021. When should Damian Company record revenue? List the amount of revenue that should be recorded at the appropriate date. Also, explain your rationale using principles of accrual accounting. What additional information would be helpful in arguing your client’s case? Explain. Present a persuasive argument for your client, the taxing authority. The taxing authority’s objective is to have Damian Company record revenue as soon as possible based on the revenue recognition principle of accrual accounting.
On January 1, 2021, Horton pays Damian a refundable deposit of $100,000 and agrees to four installment payments of $375,000. The installment payments are due on March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021. When should Damian Company record revenue? List the amount of revenue that should be recorded at the appropriate date. Also, explain your rationale using principles of accrual accounting. What additional information would be helpful in arguing your client’s case? Explain. Present a persuasive argument for your client, the taxing authority. The taxing authority’s objective is to have Damian Company record revenue as soon as possible based on the revenue recognition principle of accrual accounting.
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 67P
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On January 1, 2021, Horton pays Damian a refundable deposit of $100,000 and agrees to four installment payments of $375,000. The installment payments are due on March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021.
When should Damian Company record revenue? List the amount of revenue that should be recorded at the appropriate date. Also, explain your rationale using principles of accrual accounting. What additional information would be helpful in arguing your client’s case? Explain.
Present a persuasive argument for your client, the taxing authority. The taxing authority’s objective is to have Damian Company record revenue as soon as possible based on the revenue recognition principle of accrual accounting.
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