Revenue Recognition Principle : Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place. Profit margin ratio : It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms. 1. To explain : Revenue recognition principle.

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Answer 1

Question

Chapter 3, Problem 1AA

To determine

Revenue Recognition Principle:

Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.

Profit margin ratio:

It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.

1.

To explain: Revenue recognition principle.

2.

To determine

To explain: The way A. Company applies revenue recognition principle.

3.

To determine

Profit margin.

4.

To determine

To identify: Amount credited to income summary to summarize its revenue earned.

5.

To determine

To identify: Amount debited to income summary to summarize its expense incurred.

To determine

To identify: Amount balance of income summary account before it is closed.

7.

To determine

Assess and compare profit margin ratio of 2 different years of A. Company.

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Access the February 21, 2017, filing of the December 31, 2016, 10-K report of The Hershey Company (ticker: HSY) at SEC.gov and complete the following requirements. Required Compute or identify the following profitability ratios of Hershey for its years ending December 31, 2016, and December 31, 2015. Interpret its profitability using the results obtained for these two years. 1. Profit margin ratio (round the percent to one decimal). 2. Gross profit ratio (round the percent to one decimal). 3. Return on total assets (round the percent to one decimal). (Total assets at year-end 2014 were $5,622,870 in thousands.) 4. Return on common stockholders’ equity (round the percent to one decimal). (Total shareholders’ equity at year-end 2014 was $1,519,530 in thousands.) 5. Basic net income per common share (round to the nearest cent).

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Use the following tables to answer the question: LOGIC COMPANY Income Statement For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Gross sales 19,800 15,600 Sales returns and allowances 900 100 Net sales 18,900 15,500 COGS 11,800 8,800 Gross profit 7,100 6,700 Depreciation 780 640 Selling and administrative expenses 2,800 2,400 Research 630 540 Miscellaneous 440 340 Total operating expenses 4,650 3,920 Income before interest and taxes 2,450 2,780 Interest expense 640 540 Income before taxes 1,810 2,240 Provision for taxes 724 896 LOGIC COMPANY Balance Sheet For years ended December 31, 2016 and 2017 (values in $) 2016 2017 Current assets 12,300 9,400 Accounts receivable 16,900 12,900 Merchandise inventory 8,900 14,400 Prepaid expenses 24,400 10,400 Total current assets 62,500 47,100 Building (net) 14,900 11,400 Land 13,900 9,400 Total plant and equipment 28,800 20,800 Total assets 91,300 67,900 Accounts payable 13,400 7,400 Salaries payable 7,500 5,400 Total current…

Answer 2

Question

Chapter 3, Problem 1AA

To determine

Revenue Recognition Principle:

Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.

Profit margin ratio:

It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.

1.

To explain: Revenue recognition principle.

2.

To determine

To explain: The way A. Company applies revenue recognition principle.

3.

To determine

Profit margin.

4.

To determine

To identify: Amount credited to income summary to summarize its revenue earned.

5.

To determine

To identify: Amount debited to income summary to summarize its expense incurred.

To determine

To identify: Amount balance of income summary account before it is closed.

7.

To determine

Assess and compare profit margin ratio of 2 different years of A. Company.

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Answer 3

Question

Chapter 3, Problem 1AA

To determine

Revenue Recognition Principle:

Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.

Profit margin ratio:

It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.

1.

To explain: Revenue recognition principle.

2.

To determine

To explain: The way A. Company applies revenue recognition principle.

3.

To determine

Profit margin.

4.

To determine

To identify: Amount credited to income summary to summarize its revenue earned.

5.

To determine

To identify: Amount debited to income summary to summarize its expense incurred.

To determine

To identify: Amount balance of income summary account before it is closed.

7.

To determine

Assess and compare profit margin ratio of 2 different years of A. Company.

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Answer 4

Question

Chapter 3, Problem 1AA

To determine

Revenue Recognition Principle:

Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.

Profit margin ratio:

It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.

1.

To explain: Revenue recognition principle.

2.

To determine

To explain: The way A. Company applies revenue recognition principle.

3.

To determine

Profit margin.

4.

To determine

To identify: Amount credited to income summary to summarize its revenue earned.

5.

To determine

To identify: Amount debited to income summary to summarize its expense incurred.

To determine

To identify: Amount balance of income summary account before it is closed.

7.

To determine

Assess and compare profit margin ratio of 2 different years of A. Company.

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Answer 5

Chapter 3, Problem 1AA

To determine

Revenue Recognition Principle:

Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.

Profit margin ratio:

It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.

1.

To explain: Revenue recognition principle.

2.

To determine

To explain: The way A. Company applies revenue recognition principle.

3.

To determine

Profit margin.

4.

To determine

To identify: Amount credited to income summary to summarize its revenue earned.

5.

To determine

To identify: Amount debited to income summary to summarize its expense incurred.

To determine

To identify: Amount balance of income summary account before it is closed.

7.

To determine

Assess and compare profit margin ratio of 2 different years of A. Company.

Answer 6

Chapter 3, Problem 1AA

To determine

Revenue Recognition Principle:

Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.

Profit margin ratio:

It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.

1.

To explain: Revenue recognition principle.

Answer 7

Chapter 3, Problem 1AA

To determine

Revenue Recognition Principle:

Revenue is said to be recognized when firm become eligible to receive money for their work done and not when payment takes place.

Profit margin ratio:

It shows how much company is earning for every dollar of their revenue. It comes after dividing net sales from revenue in percentage terms.

1.

To explain: Revenue recognition principle.

Answer 8

2.

To determine

To explain: The way A. Company applies revenue recognition principle.

Answer 9

2.

To determine

To explain: The way A. Company applies revenue recognition principle.

Answer 10

3.

To determine

Profit margin.

Answer 11

3.

To determine

Profit margin.

Answer 12

4.

To determine

To identify: Amount credited to income summary to summarize its revenue earned.

Answer 13

4.

To determine

To identify: Amount credited to income summary to summarize its revenue earned.

Answer 14

5.

To determine

To identify: Amount debited to income summary to summarize its expense incurred.

Answer 15

5.

To determine

To identify: Amount debited to income summary to summarize its expense incurred.

Answer 16

To determine

To identify: Amount balance of income summary account before it is closed.

Answer 17

To determine

To identify: Amount balance of income summary account before it is closed.

Answer 18

7.

To determine

Assess and compare profit margin ratio of 2 different years of A. Company.

Answer 19

7.

To determine

Assess and compare profit margin ratio of 2 different years of A. Company.

Answer 20

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Answer 21

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Answer 22

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Answer 23

Ch. 3 - A company forgot to record accrued and unpaid...Ch. 3 - Prior to recording adjusting entries, the Supplies...Ch. 3 - Prob. 3MCQ Ch. 3 - On November 1, Stockton Co. receives $3,600 cash...Ch. 3 - Prob. 5MCQ Ch. 3 - Prob. 1DQ Ch. 3 - Prob. 2DQ Ch. 3 - Prob. 3DQ Ch. 3 - Prob. 4DQ Ch. 3 - Prob. 5DQ

Solution Summary: The author explains revenue recognition principle, which recognizes revenue when services and goods are delivered to customer at an agreed price and not when payment of goods and services takes place.

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To explain: The way A. Company applies revenue recognition principle.

Profit margin.

To identify: Amount credited to income summary to summarize its revenue earned.

To identify: Amount debited to income summary to summarize its expense incurred.

To identify: Amount balance of income summary account before it is closed.

Assess and compare profit margin ratio of 2 different years of A. Company.

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Chapter 3 Solutions