Question
I just need a guide or help for the code, I can do the rest? Facts and Background Right Price Club, Inc. (Right Price) is
I just need a guide or help for the code, I can do the rest? Facts and Background Right Price Club, Inc. (Right Price) is a publicly traded company that operates 750 discount retail stores in forty-four states nationwide. Right Price generates its revenue from both a membership fee charged to its customers and the sale of merchandise at discount retail prices. Right Price has been in business for over 25 years, and offers its customers the following service: low prices on a limited selection of branded and private-label products in a broad range of merchandise categories. Customers pay a membership fee for the right to shop at Right Price and purchase products at discounted prices. Right Price has a two-tiered membership fee structure. A two-year annual membership fee of $150 is charged to all new customers. After the first two years, a one-year annual membership fee of $50 continues to be charged. To reward customers for their long-term loyalty, no membership fee is charged after being a member for ten years. All fees are required to be paid at the beginning of the membership period. In order to encourage new members to join and old customers to renew their memberships, Right Price has a full refund policy of the entire membership fee at any time during the first year of the membership period, even if the member cancels on the very last day. This refund policy has been in existence for many years and, during that time, Right Price has experienced the following refund results. For the last five years, 30% of the two-year members and 10% of the one-year members requested refunds. Right Price has neither experienced nor anticipates estimated refunds being materially different from actual refunds. Due to the enormous popularity of the stores, Right Price has averaged in excess of 10,000 new member customers nationwide each year for the last three years. It is Right Prices accounting practice to recognize the entire fee as revenue at the beginning of each membership period. The new CEO, Ella Mentry, wants assurances that Right Prices membership revenue recognition complies with U.S. GAAP in order for her to certify the financial statements in accordance with Section 302 of the Sarbanes-Oxley Act. You are a first-year Staff Accountant at the public accounting firm, Sun and Moon, working under Reece Stater, Partner. Right Price has engaged Sun and Moon to provide analyses on Right Prices accounting practices. Ella has asked Reece to provide her with a concise analysis of whether the recognition of the entire membership fee as revenue at the beginning of each membership period is in accordance with U.S. GAAP. In turn, Reece has asked you to write an internal memo to him addressing that issue, which he will then use to communicate to Ella. Reece wants your memo to be no longer than one page.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started