Apply the revenue recognition criteria to analyze the following four short scenarios Please make sure you provide a brief explanation (less than three sentences) to your answer Scenario 1 Assume the customary practice of Entity A is to obtain a written contract executed by both parties for all arrangements Entity A negotiates with Entity B to sell a standard type of equipment The equipment that Entity B has been using is out of service and, as a result, Entity B has asked Entity A to deliver the replacement equipment as soon as possible Entity A shipped the equipment (FOB shipping point) on September 25 and receives payment from Entity B on September 30 The written contract is signed by Entity A representative on September 28 and by Entity B representative on October 5 When should the revenues from the sale be recognized Scenario 2 Company A receives purchase orders for products it manufactures At the end of its fiscal quarters, customers may not yet be ready to take delivery of the products for various reasons These reasons may include, but are not limited to, a lack of available space for inventory, having more than sufficient inventory in their distribution channel, or delays in customers' production schedules May Company A recognize revenue for the sale of its products once it has completed manufacturing, if it segregates the inventory of the products ordered by customers but staying in its own warehouse from its own products Explain May Company A recognize revenue for the sale if it ships the products to a third party warehouse Explain Scenario 3 January 1, 2015, Retailer A sells a one year membership to its warehouse discount store to Customer B for a nonrefundable fee of $200 The membership provides Customer B with unlimited shopping at the discount store during the membership term Customer B is required to pay list price for all merchandise purchased at the store At the end of the one year term, Customer B must renew its membership by paying $200 to continue to have access to the store How to recognize the $200 as revenue including when Scenario 4 Entity A, a manufacturer of cell phones, enters into an arrangement with Retailer B to be the exclusive provider of digital cell phones to the retailer In connection with the arrangement, Entity A agrees to give Retailer B $1 million on contract signing and Retailer B commits to purchase a minimum of $15 million of the phones How to recognize the revenues related to this sale

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Apply the revenue recognition criteria to analyze the following four short scenarios. Please make sure you provide a brief explanation (less than three sentences) to

Apply the revenue recognition criteria to analyze the following four short scenarios. Please make sure you provide a brief explanation (less than three sentences) to your answer.

Scenario 1:

Assume the customary practice of Entity A is to obtain a written contract executed by both parties for all arrangements. Entity A negotiates with Entity B to sell a standard type of equipment. The equipment that Entity B has been using is out of service and, as a result, Entity B has asked Entity A to deliver the replacement equipment as soon as possible. Entity A shipped the equipment (FOB shipping point) on September 25 and receives payment from Entity B on September 30. The written contract is signed by Entity A representative on September 28 and by Entity B representative on October 5. When should the revenues from the sale be recognized?

Scenario 2:

Company A receives purchase orders for products it manufactures. At the end of its fiscal quarters, customers may not yet be ready to take delivery of the products for various reasons. These reasons may include, but are not limited to, a lack of available space for inventory, having more than sufficient inventory in their distribution channel, or delays in customers' production schedules.

May Company A recognize revenue for the sale of its products once it has completed manufacturing, if it segregates the inventory of the products ordered by customers but staying in its own warehouse from its own products? Explain
May Company A recognize revenue for the sale if it ships the products to a third-party warehouse? Explain

Scenario 3:

January 1, 2015, Retailer A sells a one-year membership to its warehouse discount store to Customer B for a nonrefundable fee of $200. The membership provides Customer B with unlimited shopping at the discount store during the membership term. Customer B is required to pay list price for all merchandise purchased at the store. At the end of the one-year term, Customer B must renew its membership by paying $200 to continue to have access to the store. How to recognize the $200 as revenue including when?

Scenario 4:

Entity A, a manufacturer of cell phones, enters into an arrangement with Retailer B to be the exclusive provider of digital cell phones to the retailer. In connection with the arrangement, Entity A agrees to give Retailer B $1 million on contract signing and Retailer B commits to purchase a minimum of $15 million of the phones. How to recognize the revenues related to this sale?