Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

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Answer 1

Question

Chapter 17, Problem 5C

1.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

2.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

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After the presentation of your report on the examination of the financial statements to the board of directors of Piper Publishing Company, one of the new directors expresses surprise that the income statement assumes that an equal proportion of the revenue is recognized with the publication of every issue of the company’s magazine. She feels that the “crucial event” in the process of earning revenue in the magazine business is the cash sale of the subscription. She says that she does not understand why most of the revenue cannot be “recognized” in the period of the cash sale. InstructionsDiscuss the propriety of timing the recognition of revenue in Piper Publishing Company’s accounts with:(a) The cash sale of the magazine subscription.(b) The publication of the magazine every month.(c) Over time, as the magazines are published and delivered to customers.

The recently hired CFO of Finger Lakes Vacation Sales Corp. is concerned about some of the Year 4 situations. The CFO has come to you for advice. Finger Lakes Vacation Sales Corp. follows IFRS. Required For each scenario above, state if the situation is a change in policy, a correction of an error, or a change in estimate. Explain your answers. Also state if the situation requires a restatement of retained earnings on January 1, Year 4. What disclosures, if any, are required. Fully discuss any ethical implications related to the scenarios. The items of concern are: A. Finger Lakes Vacation Sales Corp. has provided a loyalty rewards program to customers for the past 6 years. During that time, the amounts were insignificant, and no revenues were deferred, and no accruals were made. With Year 4 changes to the plan, the amount of rewards has become material. The Controller decided that starting in January, Year 4, Finger Lakes Vacation Sales Corp. will defer the revenue related to these…

Assume that you are currently working as an accountant, and your manager has to take an unexpected sick leave. Because you did very well in your accounting classes, the Senior Accountant asks you to step up and help with the review of reconciliations. What would be your first step? Maybe you would dive right into it, assuming you would figure out what to do as you moved through all the existing reconciliations, or maybe you would ask for a copy of policies and procedures for this task if any exist, so you could find instructions without asking the Senior Accountant constantly what to do. In addition to reviewing reconciliations, you will need to review disclosures to financial statements. How would you know if all the necessary disclosures were prepared and contained correct information?

Answer 2

Question

Chapter 17, Problem 5C

1.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

2.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

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Answer 3

Question

Chapter 17, Problem 5C

1.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

2.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 17, Problem 5C

1.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

2.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

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Answer 5

Chapter 17, Problem 5C

1.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

2.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

Answer 6

Chapter 17, Problem 5C

1.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

Answer 7

Chapter 17, Problem 5C

1.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

Answer 8

2.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

Answer 9

2.

To determine

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

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Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the cash sale of the magazine subscription.

Enumerate the propriety of timing the recognition of revenue in Company S’s accounts with the publication of the magazine every month.

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