State the core principle of revenue recognition.

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Answer 1

Question

Chapter 17, Problem 1GI

To determine

State the core principle of revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue recognition principle:

Revenue recognition principle states that every business organization should recognize the revenue when it is earned, no matter, cash related to that obligation is received or not.

The “core principle of revenue recognition” is that a reporting entity must recognize revenue to represent the transmission of goods or services promised to customers in an amount that reveals the concern to which the entity anticipates to be authorized in exchange for those goods or services.

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Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+ 10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Answer 2

Question

Chapter 17, Problem 1GI

To determine

State the core principle of revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue recognition principle:

Revenue recognition principle states that every business organization should recognize the revenue when it is earned, no matter, cash related to that obligation is received or not.

The “core principle of revenue recognition” is that a reporting entity must recognize revenue to represent the transmission of goods or services promised to customers in an amount that reveals the concern to which the entity anticipates to be authorized in exchange for those goods or services.

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Answer 3

Question

Chapter 17, Problem 1GI

To determine

State the core principle of revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue recognition principle:

Revenue recognition principle states that every business organization should recognize the revenue when it is earned, no matter, cash related to that obligation is received or not.

The “core principle of revenue recognition” is that a reporting entity must recognize revenue to represent the transmission of goods or services promised to customers in an amount that reveals the concern to which the entity anticipates to be authorized in exchange for those goods or services.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 17, Problem 1GI

To determine

State the core principle of revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue recognition principle:

Revenue recognition principle states that every business organization should recognize the revenue when it is earned, no matter, cash related to that obligation is received or not.

The “core principle of revenue recognition” is that a reporting entity must recognize revenue to represent the transmission of goods or services promised to customers in an amount that reveals the concern to which the entity anticipates to be authorized in exchange for those goods or services.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1GI

To determine

State the core principle of revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue recognition principle:

Revenue recognition principle states that every business organization should recognize the revenue when it is earned, no matter, cash related to that obligation is received or not.

The “core principle of revenue recognition” is that a reporting entity must recognize revenue to represent the transmission of goods or services promised to customers in an amount that reveals the concern to which the entity anticipates to be authorized in exchange for those goods or services.

Answer 6

Chapter 17, Problem 1GI

To determine

State the core principle of revenue recognition.

Expert Solution & Answer

Explanation of Solution

Revenue recognition principle:

Revenue recognition principle states that every business organization should recognize the revenue when it is earned, no matter, cash related to that obligation is received or not.

The “core principle of revenue recognition” is that a reporting entity must recognize revenue to represent the transmission of goods or services promised to customers in an amount that reveals the concern to which the entity anticipates to be authorized in exchange for those goods or services.

Answer 7

Chapter 17, Problem 1GI

To determine

State the core principle of revenue recognition.

Answer 8

Expert Solution & Answer

Explanation of Solution

Revenue recognition principle:

Revenue recognition principle states that every business organization should recognize the revenue when it is earned, no matter, cash related to that obligation is received or not.

The “core principle of revenue recognition” is that a reporting entity must recognize revenue to represent the transmission of goods or services promised to customers in an amount that reveals the concern to which the entity anticipates to be authorized in exchange for those goods or services.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 17 - Prob. 1GI Ch. 17 - Prob. 2GI Ch. 17 - When a company recognizes revenue during a period,...Ch. 17 - Prob. 4GI Ch. 17 - Prob. 5GI Ch. 17 - What is the proper accounting for a wholly...Ch. 17 - If a seller enters into more than one contract...Ch. 17 - Prob. 8GI Ch. 17 - Prob. 9GI Ch. 17 - Prob. 10GI

State the core principle of revenue recognition.

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State the core principle of revenue recognition.

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