Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for. Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company. (a) To explain: To explain the point of sale as the basis of revenue recognition.

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Answer 1

Question

Chapter 18, Problem 3CA

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company.

(a)

To explain: To explain the point of sale as the basis of revenue recognition.

To determine

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

To determine

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

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False Value Hardware began 2013 with a credit balance of $31,900 in the allowance for sales returns account. Sales and cash collections from customers during the year were $680,000 and $640,000, respectively. False Value estimates that 5% of all sales will be returned. During 2013, customers returned merchandise for credit of $23,000 to their accounts. False Value's 2013 income statement would report net sales of: a. $657,000. b. $646,000. c. $648,100. d. $671,100.

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Answer 2

Question

Chapter 18, Problem 3CA

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company.

(a)

To explain: To explain the point of sale as the basis of revenue recognition.

To determine

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

To determine

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

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Answer 3

Question

Chapter 18, Problem 3CA

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company.

(a)

To explain: To explain the point of sale as the basis of revenue recognition.

To determine

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

To determine

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

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Answer 4

Question

Chapter 18, Problem 3CA

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company.

(a)

To explain: To explain the point of sale as the basis of revenue recognition.

To determine

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

To determine

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

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Answer 5

Chapter 18, Problem 3CA

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company.

(a)

To explain: To explain the point of sale as the basis of revenue recognition.

To determine

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

To determine

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

Answer 6

Chapter 18, Problem 3CA

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company.

(a)

To explain: To explain the point of sale as the basis of revenue recognition.

Answer 7

Chapter 18, Problem 3CA

To determine

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

Performance obligation: A promise to transfer goods or services is said to be performance obligation and it exists if a customer gets benefits from goods or service, with the available resources determined by the company.

(a)

To explain: To explain the point of sale as the basis of revenue recognition.

Answer 8

To determine

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

Answer 9

To determine

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

Answer 10

To determine

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

Answer 11

To determine

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 18 - Prob. 1Q Ch. 18 - Prob. 2Q Ch. 18 - Prob. 3Q Ch. 18 - Prob. 4Q Ch. 18 - Prob. 5Q Ch. 18 - Prob. 6Q Ch. 18 - Prob. 7Q Ch. 18 - Prob. 9Q Ch. 18 - Prob. 10Q Ch. 18 - Prob. 11Q

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(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.

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Chapter 18 Solutions

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(b) To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition. Given information: All the related information is provided in the question document.

(c) To explain: To explain the revenue recognition of over time. Given information: All the related information is provided in the question document.

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Chapter 18 Solutions

(b)

To discuss: To discuss the merits of the objections to the point-of-sale basis of revenue recognition.

Given information: All the related information is provided in the question document.

(c)

To explain: To explain the revenue recognition of over time.

Given information: All the related information is provided in the question document.