Requirement:

1)Cite the ASC down to the Paragraph.For example, (ASC 330-10-05-01)

2) Copy-paste the paragraph you cite from the codification into the word document

3)Interpret the codification paragraph into 'plain English' as best you can.In other words, how would you explain the appropriate accounting treatment to a colleague, boss, or business partner who has a basic understanding of accounting?You may (and are encouraged to) use debits and credits or t-accounts to illustrate the accounting if appropriate.

Information:

Logical Logistics Inc. (Logical Logistics or the "Company") provides transportation and logistics services to customers through a network of offices in North America, South America, and Asia. The Company contracts fleets of shipping vessels, trucks, and aircraft to provide regional, long-haul, and international shipments of customer goods. In addition, the Company contracts warehouse operators across North America for use of their facilities as distribution centers that temporarily store goods in transit. The Company has entered into the following contracts with the vendors identified below.

Logical Logistics enters into a contract with See Boat Inc. (See Boat) to use its shipping vessels to transport customer goods from North America to Asia. See Boat has a fleet of 25 multi-use shipping vessels, each of which has the capacity to hold 1,000 shipping containers.

Fly-By-Air

oThe contract term is five years.

oFBA1231, a commercial aircraft in Fly-By-Air's fleet, is dedicated to delivering Logical Logistics's shipping pallets during the term of the contract.

oLogical Logistics determines (1) the airports from and to which goods are shipped and received and (2) the order in which deliveries are made to the airports. Fly-By-Air provides the aircraft's pilot and crew, and Logical Logistics instructs Fly-By-Air accordingly

oWhile Logical Logistics determines what cargo will be transported throughout the term of the contract, certain restrictions prevent the Company from shipping flammable materials.

oLogical Logistics has the right to send the aircraft regardless of whether its cargo levels meet the full storage capacity of the aircraft. If FBA1231is below capacity, Fly-By-Air cannot use the excess storage space to ship products of its other customers.