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JMI Industries, a publicly traded company, manufactures and sells coaxial and fiber optical cable. JMI is contemplating two separate transactions for which it is evaluating
JMI Industries, a publicly traded company, manufactures and sells coaxial and fiber optical cable. JMI is contemplating two separate transactions for which it is evaluating the appropriate revenue recognition. Transaction Bigwire, a customer of JMI, has entered into a binding written to purchase agreement 1,000 feet of fiber optic cable for $3 per foot. Because BigWire is constructing a new warehouse, it is unable to take delivery of the cable and has requested in writing that JMI store the cable in its warehouse until construction of Bigwire's warehouse is completed. Bigwire's warehouse will be completed three months from the time of purchase, at which time Bigwire is required to take deli of the cable. fiber optic cable in 10,000-foot spools (spools of cable are considered goods and ready for shipment). JMI will not physically segregate the cable that purchase Bigwire will rather, the Company will designa the quantity in its inventory tracking as "sold," thereby preventing the use of the cable to fulfill other customer orders. In other words, JMI will virtually" segregate the inventory
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