Determine net income for Bountiful Flower Shop inc

/u/0/#inbox/FMfcgxwltZxvKuBJCgjbzXzSVczcQxNz?projector=1&messagePartid=0.1 1. (40 points) Jill is the Controller of Bountiful Flower Shops Inc. ("BFS"), which owns and operates a chain of national florist shops in big cities across the United States. BFS's customers consist of individuals and rural flower shops. One of BFS's flower arrangements for weddings is called Wedding Daydream. Wedding Daydream sells for $2,500 and costs BFS S1,875 to create, which includes flowers, supplies, labor, utilities, rent, and other costs. BFS sells Wedding Daydream on a standalone basis directly to customers, as well as provides wedding setup as a separate service. Wedding setup services have a standalone price of $250 per setup and cost $200 per setup. Income data for BFS's first quarter of 2020 from operations other than Wedding Daydream are as follows: Revenues Expenses $6,500,000 4,250,000 BFS has the following information related to three Wedding Daydream revenue arrangements during the first quarter of 2020. a) To generate additional business during the first quarter of 2020, BFS offered Wedding Daydreams at a discount of 10% to flower shops who have not previously purchased flowers from BFS On March 29, 2020, BFS sold five of its Wedding Daydreams to Country Florist, a new customer. In addition to the 10% discount, the sales agreement also includes a provision that if Country Florist is dissatisfied with the product, BFS will grant an allowance on the sales price or take the product back. BFS expects total allowances on the sale to Country Florist to be $500. b) BFS sold 10 Wedding Daydreams to Jane's Florist, an existing customer, for a total price of S26,000. The sales price includes 10 wedding setups. The Wedding Daydreams are delivered by March 30, 2020, but none of the wedding setups have been performed c) Big City Florists has experienced inventory supply problems because it's regular supplier has gone out of business. As a result, Big City Florists has asked BFS to provide 250 Wedding Daydreams to cover the inventory shortage on a short-term basis. BFS and Big City Florists have agreed that 250 Wedding Daydreams will be delivered for a price of $500,000, plus a bonus of $500 for each Wedding Daydream that Big City Florists sells to a customer. Based on prior experience, BFS estimates that there is a 25% probability that all 250 Wedding Daydreams will be resold by Big City Florists, and a 75% probability that 200 Wedding Daydreams will be resold by Big City Florists. BFS uses the mali Wedding setup services have a standalone price of $250 per setup and cost $200 per setup. Income data for BFS's first quarter of 2020 from operations other than Wedding Daydream are as follows: Revenues Expenses $6,500,000 4,250,000 BFS has the following information related to three Wedding Daydream revenue arrangements during the first quarter of 2020. a) To generate additional business during the first quarter of 2020, BFS offered Wedding Daydreams at a discount of 10% to flower shops who have not previously purchased flowers from BFS. On March 29, 2020, BFS sold five of its Wedding Daydreams to Country Florist, a new customer. In addition to the 10% discount, the sales agreement also includes a provision that if Country Florist is dissatisfied with the product, BFS will grant an allowance on the sales price or take the product back. BFS expects total allowances on the sale to Country Florist to be $500. b) BFS sold 10 Wedding Daydreams to Jane's Florist, an existing customer, for a total price of $26,000. The sales price includes 10 wedding setups. The Wedding Daydreams are delivered by March 30, 2020, but none of the wedding setups have been performed. c) Big City Florists has experienced inventory supply problems because it's regular supplier has gone out of business. As a result, Big City Florists has asked BFS to provide 250 Wedding Daydreams to cover the inventory shortage on a short-term basis. BFS and Big City Florists have agreed that 250 Wedding Daydreams will be delivered for a price of $500,000, plus a bonus of $500 for each Wedding Daydream that Big City Florists sells to a customer. Based on prior experience, BFS estimates that there is a 25% probability that all 250 Wedding Daydreams will be resold by Big City Florists, and a 75% probability that 200 Wedding Daydreams will be resold by Big City Florists. BFS uses the most likely amount method for determining variable consideration. BFS delivered the 250 Wedding Daydreams on March 30, 2020 Required: Determine income for Bountiful Flower Shops Inc, for the first quarter of 2020 (ignore income taxes). You must show all calculations. /u/0/#inbox/FMfcgxwltZxvKuBJCgjbzXzSVczcQxNz?projector=1&messagePartid=0.1 1. (40 points) Jill is the Controller of Bountiful Flower Shops Inc. ("BFS"), which owns and operates a chain of national florist shops in big cities across the United States. BFS's customers consist of individuals and rural flower shops. One of BFS's flower arrangements for weddings is called Wedding Daydream. Wedding Daydream sells for $2,500 and costs BFS S1,875 to create, which includes flowers, supplies, labor, utilities, rent, and other costs. BFS sells Wedding Daydream on a standalone basis directly to customers, as well as provides wedding setup as a separate service. Wedding setup services have a standalone price of $250 per setup and cost $200 per setup. Income data for BFS's first quarter of 2020 from operations other than Wedding Daydream are as follows: Revenues Expenses $6,500,000 4,250,000 BFS has the following information related to three Wedding Daydream revenue arrangements during the first quarter of 2020. a) To generate additional business during the first quarter of 2020, BFS offered Wedding Daydreams at a discount of 10% to flower shops who have not previously purchased flowers from BFS On March 29, 2020, BFS sold five of its Wedding Daydreams to Country Florist, a new customer. In addition to the 10% discount, the sales agreement also includes a provision that if Country Florist is dissatisfied with the product, BFS will grant an allowance on the sales price or take the product back. BFS expects total allowances on the sale to Country Florist to be $500. b) BFS sold 10 Wedding Daydreams to Jane's Florist, an existing customer, for a total price of S26,000. The sales price includes 10 wedding setups. The Wedding Daydreams are delivered by March 30, 2020, but none of the wedding setups have been performed c) Big City Florists has experienced inventory supply problems because it's regular supplier has gone out of business. As a result, Big City Florists has asked BFS to provide 250 Wedding Daydreams to cover the inventory shortage on a short-term basis. BFS and Big City Florists have agreed that 250 Wedding Daydreams will be delivered for a price of $500,000, plus a bonus of $500 for each Wedding Daydream that Big City Florists sells to a customer. Based on prior experience, BFS estimates that there is a 25% probability that all 250 Wedding Daydreams will be resold by Big City Florists, and a 75% probability that 200 Wedding Daydreams will be resold by Big City Florists. BFS uses the mali Wedding setup services have a standalone price of $250 per setup and cost $200 per setup. Income data for BFS's first quarter of 2020 from operations other than Wedding Daydream are as follows: Revenues Expenses $6,500,000 4,250,000 BFS has the following information related to three Wedding Daydream revenue arrangements during the first quarter of 2020. a) To generate additional business during the first quarter of 2020, BFS offered Wedding Daydreams at a discount of 10% to flower shops who have not previously purchased flowers from BFS. On March 29, 2020, BFS sold five of its Wedding Daydreams to Country Florist, a new customer. In addition to the 10% discount, the sales agreement also includes a provision that if Country Florist is dissatisfied with the product, BFS will grant an allowance on the sales price or take the product back. BFS expects total allowances on the sale to Country Florist to be $500. b) BFS sold 10 Wedding Daydreams to Jane's Florist, an existing customer, for a total price of $26,000. The sales price includes 10 wedding setups. The Wedding Daydreams are delivered by March 30, 2020, but none of the wedding setups have been performed. c) Big City Florists has experienced inventory supply problems because it's regular supplier has gone out of business. As a result, Big City Florists has asked BFS to provide 250 Wedding Daydreams to cover the inventory shortage on a short-term basis. BFS and Big City Florists have agreed that 250 Wedding Daydreams will be delivered for a price of $500,000, plus a bonus of $500 for each Wedding Daydream that Big City Florists sells to a customer. Based on prior experience, BFS estimates that there is a 25% probability that all 250 Wedding Daydreams will be resold by Big City Florists, and a 75% probability that 200 Wedding Daydreams will be resold by Big City Florists. BFS uses the most likely amount method for determining variable consideration. BFS delivered the 250 Wedding Daydreams on March 30, 2020 Required: Determine income for Bountiful Flower Shops Inc, for the first quarter of 2020 (ignore income taxes). You must show all calculations