Question
ABC Corp. is a firm with stagnating growth. They engaged in a number of transactions to promote sales: - On December 31, 20XX, ABC had
ABC Corp. is a firm with stagnating growth. They engaged in a number of transactions to promote sales:
- On December 31, 20XX, ABC had $150,000 worth of merchandise ready to ship (FOB Shipping Point). However, Fed-Ex could not make the pick-up until Jan.2. The sales were booked in 20X1.
- On Dec.24, 20X1, the day before Xmas, ABC Corp. notified its customers that it would be closing its loading deck for the holidays. They advised their customers that all sales returns should be made after the holidays, after Jan. 2, 20X2.
- The CFO of ABC Corp. contacted his distributors regarding his excess merchandise inventory, and offered those distributors unlimited rights to return, if they would take shipment before Dec.31, 20X1.
Please discuss the events in terms of ABC Corps. sales promotion effort, and frame your answer in terms of how they ought to be handled in an audit.
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