Flyalot has agreements with several major airlines to obtain airline tickets at reduced rates. Th e company pays only for tickets it sells to customers. In the most recent period, Flyalot sold airline tickets to customers over the internet for a total of $1.1 million. Th e cost of these tickets to Flyalot was $1 million. Th e company’s direct selling costs were $2,000. Once the customers receive their ticket, the airline is responsible for providing all services associated with the customers’ fl ights. 1 . Demonstrate the reporting of revenues under: A . gross reporting. B . net reporting. 2 . Determine and justify the appropriate method for reporting revenues.

Flyalot has agreements with several major airlines to obtain airline tickets at reduced rates. Th e company pays only for tickets it sells to customers. In the most recent period, Flyalot sold airline tickets to customers over the internet for a total of $1.1 million. Th e cost of these tickets to Flyalot was $1 million. Th e company’s direct selling costs were $2,000. Once the customers receive their ticket, the airline is responsible for providing all services associated with the customers’ fl ights. 1 . Demonstrate the reporting of revenues under: A . gross reporting. B . net reporting. 2 . Determine and justify the appropriate method for reporting revenues.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 3C

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Sur Travel Company intends to sell its customers a special round-trip airline ticket package to Salalah. The Company will be able to purchase the package from Oman Air for OMR 170 each. The round-trip tickets will be sold for OMR 200 each and the airline intends to reimburse Sur Travel for any unsold ticket packages. Fixed costs for Sur Travel include OMR 3,000 in advertising costs.How many ticket packages will Sur Travel need to sell to break even? O a. 100 packages O b. 9 packages Oc. 18 packages O d. 15 packages NEXT PAGE ation nere to search W 19:09 DA d0) ENG 07-04-2021 の hp ト」 "prt sc delete home end Dg up %23 96 + backspace num tock R T. P home D F G K enter pause C レ * shift 11 end alt ctrl
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