lle future 00. Gillian does not n how financial statements help the bank with its decision on whether or not to lend money to kamlbbp en(b) Explain why the bank has requested an independent review of the financial statements c Calculate the correct amounts for current assets, current liabilities, sales, cost of goods sold, and total operating TAKING IT FURTHER Calculate the current ratio based on (a) the preliminary financial statements and (b) the corrected amounts. Is the current ratio based on the corrected amounts better or worse? Does there appear to be bias in the types of errors that were made? Explain expenses.Explain each of your corrections. Kamloops Company uses the earnings approach to recognize revenue. per records some of song Appliance inecenern esh are hat she can acumul servdckages w mpany. -3A Santas Holiday Farm sells and delivers fir trees over the holiday season. The trees sell for $50 each and Identify contract components the farm also offers a removal service after the holiday season for $20. The trees cost $15 each. In November and and prepare journal entries- December 2017, the farm offers customers a holiday package that costs $60 and includes both a fir tree and removal contract-based approach, service. The trees will be removed on January 3, 2018. On December 2, 2017, Santa's Holiday Farm sells 200 holi- multiple performance day packages which are all delivered on the same day obligations. (LO 4) AP Instructions questions related to the holiday packages sold by Santa's Holiday Farm: l. Is there a contract? If so, describe the contract. 2. What is Santas Holiday Farm's performance obligation(s)? 3. What is the transaction price? 4. Is there a need to allocate the transaction price? 5. Has the performance obligation(s) been satisfied? If so, when? (a) Using the five-step model for revenue recognition under the contract-based approach, answer the following anager be looking fe ts appropriate? If not, what are the nt problems? Is (b) Prepare any journal entries required to record revenue. (Round to the nearest dollar.) TAKING IT FURTHER Stephen Forni is the manager of Santas Holiday Farm. He has found the use of the contract-based approach to revenue recognition very challenging and does not understand why he cannot go back P11-4A The following transactions took place in December 2017 for MegaMart. MegaMart uses the contract- Identify elements of th based approach to revenue recognition and a perpetua nventory system. MegaMart estimates returns at l%osa es fiancia statements any. Based on th to the old way of doing it. Explain to Stephen why accounting standards change over time. contract-based approa he company bs Dec. 4 Purchased a building for $200,000 by borrowing $160,000 from the bank and paying the rest in cash.evenue transactions