Policy Decisions. Consider the following independent situations Annematonal health club sells lifetime memberships costing $1,500 which allow the purchaser unlim de of any of the club 100 acilities around the world. The initiation fee may be paid in month Franklin Motorne has always offered a limited 36- month warranty on its cars and trucks but to do something more. With that in mind, the company developed a new way pogota S00 counter the sun cant competition in the industry, the company has come to the conclusion that it must payment at the time of purchase a customer can buy a ven-year way that will be aastal and labor. The purchased wanty expires at the end of seven years or when the installments, with a two percent interest charge on any unpaid balance. sells the vehicle, whichever occurs first 3. Chandler Promotions Inc. sells coupon books that give the holder a ten percent discount at any of savings. Chandler convinces merchants to participate in the program at no cost, arguing that partici will build customer traffic and will create the opportunity for repeat business from the coupon book older Comfort Furniture sells household furniture. Customers can pay for the furniture at the time of delivery they can wait one year to make payment. In the latter case, the customer must pay for the retail price the furniture plus an additional 16 percent. If the customer decides to pay after one year, should Combo Furniture report the additional 16 percent as part of the revenue from selling the furniture or should it be reported separately? Assume that the ability to collect the receivable is not an issue. 5. Local News, Inc. prints and distributes a weekly newspaper throughout the city. Local stores order certain number of the papers each week and pay for them on delivery. Local News always takes back unsold papers and gives the merchant a credit toward future purchases. For each of these situations, describe the revenue recognition policy that you believe that the company follow, explaining the basis for your recommendation Revenue Recognition. The Harris Corporation contract with The Color various metal component parts that would be assembled by Harris before resale to placed its most recent order with Coates for 10.000 parts in December 2019. Because mitments, however Coates indicated that work on the Harris onder could not with an expected delivery date of February 2020. Coates provides its customers with 1/30, and thus didn't expect to be paid the contract price of $100.000 by Harris In which month should Coates Company recognize the $100.000 in to Analyzing Accounts Receivable. The following information is taken from the Electric Company Balance Accounts receivable net of the allowance for alle Bccounts of 53.250 and 52 535, respectively Policy Decisions. Consider the following independent situations Annematonal health club sells lifetime memberships costing $1,500 which allow the purchaser unlim de of any of the club 100 acilities around the world. The initiation fee may be paid in month Franklin Motorne has always offered a limited 36- month warranty on its cars and trucks but to do something more. With that in mind, the company developed a new way pogota S00 counter the sun cant competition in the industry, the company has come to the conclusion that it must payment at the time of purchase a customer can buy a ven-year way that will be aastal and labor. The purchased wanty expires at the end of seven years or when the installments, with a two percent interest charge on any unpaid balance. sells the vehicle, whichever occurs first 3. Chandler Promotions Inc. sells coupon books that give the holder a ten percent discount at any of savings. Chandler convinces merchants to participate in the program at no cost, arguing that partici will build customer traffic and will create the opportunity for repeat business from the coupon book older Comfort Furniture sells household furniture. Customers can pay for the furniture at the time of delivery they can wait one year to make payment. In the latter case, the customer must pay for the retail price the furniture plus an additional 16 percent. If the customer decides to pay after one year, should Combo Furniture report the additional 16 percent as part of the revenue from selling the furniture or should it be reported separately? Assume that the ability to collect the receivable is not an issue. 5. Local News, Inc. prints and distributes a weekly newspaper throughout the city. Local stores order certain number of the papers each week and pay for them on delivery. Local News always takes back unsold papers and gives the merchant a credit toward future purchases. For each of these situations, describe the revenue recognition policy that you believe that the company follow, explaining the basis for your recommendation Revenue Recognition. The Harris Corporation contract with The Color various metal component parts that would be assembled by Harris before resale to placed its most recent order with Coates for 10.000 parts in December 2019. Because mitments, however Coates indicated that work on the Harris onder could not with an expected delivery date of February 2020. Coates provides its customers with 1/30, and thus didn't expect to be paid the contract price of $100.000 by Harris In which month should Coates Company recognize the $100.000 in to Analyzing Accounts Receivable. The following information is taken from the Electric Company Balance Accounts receivable net of the allowance for alle Bccounts of 53.250 and 52 535, respectively
