Question
Comprehensive Analysis for Deer & Co Mining Services (One question with concatenated portions which need to be answered for the entire inferential analysis) Due to
Comprehensive Analysis for Deer & Co Mining Services (One question with concatenated portions which need to be answered for the entire inferential analysis)
Due to the nature of the specific industry, Deer & Cos Mining Services Division is paid (i.e., Deer & Co receives cash) by their customers in advance of Deer & Co actually performing the services. Deer & Co recognizes revenue from these services over the service period. Assume that all such service sales work this way and that these service sales are the only ones which are paid for in advance.
An alternative treatment (which is not allowed under GAAP) for the service revenues would be to record revenue at the time at which cash is received. No further entry would then be needed when the services are provided.
To keep the analysis simple, assume that differences in the timing of revenue recognition do NOT affect the timing of expense recognition (alternatively, assume that the direct costs of providing the services are negligible). Ignore taxes.
1. If Deer & Co had always used the alternative treatment to account for Mining Services revenues, what would have been their Total sales and revenues for the year ended December 31, 2021? __________
2. If Deer & Co had always used the alternative treatment to account for Mining Services revenues, what would have been their debt-assets ratio (defined as total liabilities divided by total assets) as of December 31, 2021? Express your answer to two decimal places (i.e., 12.34% rather than 12%). __________
Income Statement
Balance Sheet
SE
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started