Chapter 12, Problem 2.1E

A company enters into a contract to sell 70 products to a customer for $80 each.  After the company transfers 30 of the 70 products, the customer orders an additional 25 products.  The contract is modified, and the additional 25 products are priced at $40 each.  $40 is not reflective of the product's standalone selling price.  What is the price per product for the remaining 65 products (40 products from the original contract and 25 products from the modification)?      A. $80 for the remaining 40 from the original contract and $40 for the additional 25products from the modification        B. $60, the average of the prices for the remaining products        C. $40, the new price for the products specified in the contract modification        D. $64.62, the blended price for the products from the original contract and the modification

Financial accounting

Compute the net income

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Paw Gallery and Shell Portraits both offer downloadable photographs to their customers.  Paw Gallery has a collection of animal photographs that may be downloaded by its subscribers.  Subscribers pay an annual fee for an access code allowing the user to download images from the site.  Shell Portraits takes photographs at the customer's location.  Shell emails each customer a unique code to access their photos once they are completed.  The access code is active for one week after it has been delivered.  Both Paw and Shell allow unlimited reproduction of their images.  When should Paw and Shell recognize revenue for these image sales? Paw Gallery Shell Portraits      A. At access code delivery At access code delivery        B. At access code delivery Over access duration        C. Over access duration At access code delivery        D. Over access duration Over access duration

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A company owns a machine with a $10,000 carrying value, $5,000 estimated salvage value, and $90,000 fair value.  The machine was irreparably damaged by a customer and, as a result, was deemed worthless.  A court awarded damages of $90,000 in favor of the company.  At the current year end, the outcome of this case was awaiting appeal and was, therefore, uncertain.  However, the company's legal counsel believes the appeal will be denied.  What amount of gain, if any, should the company report for this lawsuit in its current-year financial statements?      A. $0        B. $75,000        C. $80,000        D. $90,000