Diversified Industries sells sump pumps to home improvement retailers and commercial customers Its most popular product is called the Super Soaker Diversified had the following activities during the year The companys fiscal year ends on December 31 Assume all transactions are for cash unless told otherwise Diversified purchased 350 Super Soakers during the period, at a cost of $620 each Diversified sells the Super Soaker to home improvement retailers for $1,000 a unit Diversified delivered 300 Super Soakers to Home Depot Diversified has billed Home Depot but has not yet received the $300,000 payment due To encourage sales, Diversified offers Home Depot customers a $50 mail in rebate Historically, similar rebates had a 40 redemption rate By December 31, Diversified has received 60 rebates Although the Super Soaker is its main source of revenue, Diversified also provides monthly maintenance services for the convenience of its commercial customers for $100 per unit per month On April 1, Diversified received $18,000 from a commercial customer who owns five Super Soakers, in exchange for a 3 year monthly maintenance service plan Diversified outsources maintenance services to a third party at a cost of $40 an hour The contractor spends 1 hour per month maintaining each unit Diversified spent $25,000 performing market research and developing a new product during the year The company spent another $3,000 patenting the product with the U S Patent and Trademark office on July 1 The patent has a useful life of 5 years Diversified uses straight line method to amortize its intangible assets and reduces the intangible asset for any amortization, rather than using an Accumulated Amortization account Diversified discovered that the technological process to manufacture Super Soakers was updated As a result, the current replacement cost of Diversifieds stock of Super Soakers went down to $590 per unit by the end of the year Diversifieds tax rate is 30 The tax return will not be filed, nor the taxes paid, until March 15 of the following year Before getting started, take a moment to think about when revenue should be recognized on the Income Statement under U S GAAP When should expenses be recognized on the Income Statement under U S GAAP Briefly explain

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Diversified Industries sells sump-pumps to home improvement retailers and commercial customers. Its most popular product is called the Super Soaker. Diversified had the following activities

Diversified Industries sells sump-pumps to home improvement retailers and commercial customers. Its most popular product is called the Super Soaker. Diversified had the following activities during the year. The companys fiscal year ends on December 31. Assume all transactions are for cash unless told otherwise.

Diversified purchased 350 Super Soakers during the period, at a cost of $620 each.
Diversified sells the Super Soaker to home improvement retailers for $1,000 a unit. Diversified delivered 300 Super Soakers to Home Depot. Diversified has billed Home Depot but has not yet received the $300,000 payment due.
To encourage sales, Diversified offers Home Depot customers a $50 mail-in rebate. Historically, similar rebates had a 40% redemption rate. By December 31, Diversified has received 60 rebates.
Although the Super Soaker is its main source of revenue, Diversified also provides monthly maintenance services for the convenience of its commercial customers for $100 per unit per month. On April 1, Diversified received $18,000 from a commercial customer who owns five Super Soakers, in exchange for a 3-year monthly maintenance service plan.
Diversified outsources maintenance services to a third-party at a cost of $40 an hour. The contractor spends 1 hour per month maintaining each unit.
Diversified spent $25,000 performing market research and developing a new product during the year. The company spent another $3,000 patenting the product with the U.S. Patent and Trademark office on July 1. The patent has a useful life of 5 years. Diversified uses straight-line method to amortize its intangible assets and reduces the intangible asset for any amortization, rather than using an Accumulated Amortization account.
Diversified discovered that the technological process to manufacture Super Soakers was updated. As a result, the current replacement cost of Diversifieds stock of Super Soakers went down to $590 per unit by the end of the year.
Diversifieds tax rate is 30%. The tax return will not be filed, nor the taxes paid, until March 15 of the following year.

Before getting started, take a moment to think about when revenue should be recognized on the Income Statement under U.S. GAAP? When should expenses be recognized on the Income Statement under U.S. GAAP. Briefly explain.