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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The following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500 Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000. Sold merchandise to Abbey Corp; invoice amount, $36,000. Sold merchandise to Brown Company; invoice amount, $47,600. Abbey paid the invoice in (b) within the discount period. Sold merchandise to Cavendish Inc.; invoice amount, $50,000. Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods. Brown paid its account in full within the discount period. Sold merchandise to Decca Corporation; invoice amount, $42,400. Cavendish paid its account in full after the…

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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. 8Q Ch. 18 - Prob. 9Q Ch. 18 - Prob. 10Q

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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.