Daphne’s Catering Ltd case writing

605-20-25-4, Revenue Recognition Services; acquisition of a contract and that would have not been incurred but for the acquisition of that contract shall be deferred and charge to expense in proportion to the revenue recognized.

4. On the basis of the response to Question 3, how should Coconut account for the execution of the May 1, 2012, agreement? Provide the deferred revenue balance and cumulative revenue recognized related to the Buffett arrangement upon execution of the May 1, 2012, agreement.

c. ASC 605-28-25-3 states that in order to “…recognize the milestone consideration in its entirety as revenue in the period in which the milestone is achieved, the milestone shall be substantive in its entirety.”

g. On December 31, 2012, the company completed the work on a contract for an out-of-province company for $7,900 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction.

I am an advisor to the CFO hired to evaluate the events that occurred during the year ended December 31st, 2017, and to prepare a report on an examination of the financial statements, any issues with Athina’s new management, and any problems that could potentially affect net income and the amount the national chain is due.

* On Income Statement for December 31, 2011, the number of Revenues, Cost of Goods Sold, Expenses and Net Income will go

Revenue recognition is one of the top causes for financial statement restatements. In addition, revenue recognition is an area commonly questioned by the Securities and Exchange Commission (SEC) staff in their review of public filings and resultant comment letter process. Furthermore, revenue recognition is often prey to financial fraud.

* Full revenue recognition method would recognize total revenue and total cost at the date of sale. Adjustments will be recognized when the warranty is used in the contract period, giving by the FASB’s Statement of Financial Accounting Concept No. 5, “Recognition and Measurement in Financial Statements of Business Enterprises”. When revenue is recognized and at the end of initial

* The vendor can reasonably estimate the fair value of the benefit identified under the preceding condition. If the amount of consideration paid by the vendor exceeds the estimated fair value of the benefit received, that excess amount shall be characterized as a reduction of revenue when recognized in the vendor’s income statement.

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

This case analysis commences by explaining the type of accounting officer needed to execute the job functions for the client, Big Spenders Inc. The next objective will be to examine the income statements of the two prospective business entities that the client intends to choose from concerning investment – in order to diversify its portfolio. The strategies that will be explored in terms of the analysis of the income statements includes the computation of (i) operation profit margin, (ii) gross margin, (iii) net profit margin, and (iv) return on equity – for both companies of interest. The results of examinations will put the accountant in a position to make sounds recommendation to his superior at BUSI 1043 LLP, so that Big Spenders Inc. can be properly guided.

Assuming that 10% of the stamps will not be redeemed, the ledger will be looks like:

According to Kimmel, Kieso and Waygandt (2011), "the revenue recognition principle requires that companies recognize revenue in the accounting period in which it is earned." Basically, this means that revenues should be recognized (or in other words recorded) on completion of the process of revenue generation i.e. once revenue has been earned. This is as per the accrual basis of accounting. Essentially, revenue recognition derives its significance from its utilization when it comes to the determination of the specific accounting period in which earnings should be recorded.

The purpose of the report is to measure the performance, financial position and liquidity of the general retailer, Debenhams plc. Its operation would be compared to that of the prior year as well as that of a rival company in the same industry.

2.3 Revenue (AASB 1004) Revenue is recognized to the extent that it is probable that economic benefits will flow to the Group, at the point where a right to consideration or