Refer to the 10-K reports of Under Armour, Inc., and Columbia Sportswear that are available for download from the companion website at CengageBrain.com.
Required:
1. Describe each company's revenue recognition policy. Is this policy consistent with the revenue recognition principle?
2. Which accounts on the balance sheet and income statement of each company may require adjusting entries? Would these accounts require accruals or deferrals?
3. How much would Under Armour credit and debit to Income Summary for the year ending December 31, 2016? How much would Columbia credit and debit to Income Summary for the fiscal year ending December, 2016?
4. Compare how much each company reported as income tax expense and as cash paid for taxes for the most recent year. Why are the amounts different, and where would this difference be reported on the financial statements?