Performance obligation Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract. The revenue recognition principle The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed. To discuss: The manner in which S Company’s 1997 “bill-and-hold” strategy might have contributed to artificially high earnings in 1997.
Performance obligation Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract. The revenue recognition principle The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed. To discuss: The manner in which S Company’s 1997 “bill-and-hold” strategy might have contributed to artificially high earnings in 1997.
Solution Summary: The author analyzes how S Company's 1997 bill-and-hold strategy might have contributed to an artificially high earnings in 1997.
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
Chapter 5, Problem 5.11BYP
Requirement – 1
To determine
Performance obligation
Performance obligation is the promise made by the seller to supply the goods and service to the customer on or before the contract.
The revenue recognition principle
The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.
To discuss: The manner in which S Company’s 1997 “bill-and-hold” strategy might have contributed to artificially high earnings in 1997.
Requirement – 2
To determine
To discuss: The manner in which the strategy have led to the unusually high accounts receivable.
Requirement – 3
To determine
To discuss: The manner in which the S Company’s 1997 bill-and-hold strategy might have constituted to a 1998 earnings decline.
Requirement – 4
To determine
To discuss: The manner in which the earnings management affects earning quality.
Prepare the journal entries to account for the defined benefit pension plan in the books of Flagstaff Ltd for the year ended December 31 2020 and the pension table for the following pic.
Additional information(a) All contributions received by the plan were paid by Flagstaff Ltd.(b) The interest rate used to measure the present value of the defined benefitobligation was 9% at 31 December 2019 and 31 December 2020.(c) The asset ceiling was nil at 31 December 2019 and 31 December 2020.
Calculate the actuarial gain or loss for the defined benefit obligation for 2020 Calculate the return on plan assets, excluding any amount recognized in net interest for2020
Additional information(a) All contributions received by the plan were paid by Flagstaff Ltd.(b) The interest rate used to measure the present value of the defined benefitobligation was 9% at 31 December 2019 and 31 December 2020.(c) The asset ceiling was nil at 31 December 2019 and 31 December 2020.
Questiona) Determine the surplus or deficit of Flagstaff Ltd.’s defined benefit plan at 31 December2020 and determine the net defined benefit asset or liability that should be recognized by FlagstaffLtd at 31 December 2020 b) Calculate the net interest for 2020