Archer, Maddie and Dillon are keen to make sure that the profit of the business has not been understated and so have asked you to

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Archer, Maddie and Dillon are keen to make sure that the profit of the business has not been understated and so have asked you to undertake a review of the draft income statement prepared by Hamish. As part of this review, they have asked you to:
a. Identify and explain at least one area where professional judgement may have impacted ASD’s reported profitability.
b. Advise whether a large sale which was invoiced and delivered to the customer on 28 August 20X8 but for which payment was not received until 4 September would be reported as part of the August Income Statement or the September Income Statement or both?

The purchases of these watches from the offshore supplier have been received by ASD as follows: Opening inventory at 1 Jul 20X8 Nil Purchases on 15 Jul 20X8 1000 units @ $55 Purchases on 23 Aug 20X8 1200 units @ $58 Purchases on 13 Sep 20X8 1800 units @ $52 ASD has sold 3200 watches to major national surf retailers during the September 20X8 quarter (from 1 July 20X8 to 30 September 20X8). Details of the sales are as follows: 22 Jul 20X8 25 Aug 20X8 8 Sep 20X8 15 Sep 20X8 28 Sep 20X8 Waves Surf Shop Down the Line (DTL) Surf Co Beasty Barrel Surf Apparel Ace Surf-wear Buchan the Trendz 800 units @ $95 850 units @ $95 450 units @ $95 500 units @ $95 600 units @ $95