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Doors Unlimited Ltd. purchases units of wood frames that have manufacturer's volume rebates from Traders|nc. The rebate requires Coors Unlimited to purchase a minimum number
Doors Unlimited Ltd. purchases units of wood frames that have manufacturer's volume rebates from Traders|nc. The rebate requires Coors Unlimited to purchase a minimum number of units in a calendaryear. The initial unit cost of each wood frame is $2.50 before any rebate. If morethan 3,500 units are purchased, the rebate is $0.25 per unit for all units purchased beyond the base amount of 3,500 units. Doors Unlimited has a June 30 fiscal yearend. By June 30,2023 , Coors Unlimited had purchased 3,000 wood frames for the sixmonth period from January 1, 2023, to June 30, 2023. [oors Unlimited ertimates that an additional 3,000 wood framer will be purchased from July 1, 2023, to December 31, 2023. Doors Unlimited's management is very confident that thisertimate will be confirmed by future purchases from Traders. (a) Explain the conceptual principles involved in determining if an accrual should be made for the volume rebatefrom Traders. Under what circumstances would an accrual not be permissible? Doors Unlimited Ltd. purchases units of wood frames that have manufacturer's volume rebates from Traders|nc. The rebate requires Coors Unlimited to purchase a minimum number of units in a calendaryear. The initial unit cost of each wood frame is $2.50 before any rebate. If morethan 3,500 units are purchased, the rebate is $0.25 per unit for all units purchased beyond the base amount of 3,500 units. Doors Unlimited has a June 30 fiscal yearend. By June 30,2023 , Coors Unlimited had purchased 3,000 wood frames for the sixmonth period from January 1, 2023, to June 30, 2023. [oors Unlimited ertimates that an additional 3,000 wood framer will be purchased from July 1, 2023, to December 31, 2023. Doors Unlimited's management is very confident that thisertimate will be confirmed by future purchases from Traders. (a) Explain the conceptual principles involved in determining if an accrual should be made for the volume rebatefrom Traders. Under what circumstances would an accrual not be permissible
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