Requirement:

-Answer much or as little as you feel necessary to answer each question to the best of your ability

-You may usethe Accounting Standards Codification.

- Follow your own accounting and ethical decision-making clearly and to be able to not just understand what your decision(s) should be, but also why you feel that they are best, considering the impact on ALL the entity's stakeholders, including yourself.

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.

Logical Logistics enters into a contract with Fly-By-Air Inc. (Fly-By-Air) to use its aircraft to transport customer goods from South America to North America. Fly-By-Air has a fleet of 50 multi-use aircraft, each of which has the capacity to hold 500 shipping pallets of customer goods.

See Boat

oThe contract term is for the duration of the voyage to transport Logical Logistics's cargo from Los Angeles to Shanghai. Logical Logistics does not have discretion to change the departure or arrival ports without a renegotiation of the contract fees.

oSB0829, a commercial shipping vessel in See Boat's fleet, is dedicated to delivering Logical Logistics's cargo for the term of the contract. See Boat cannot substitute SB0829 with another vessel in its fleet.

oThe contract identifies the shipping containers and acceptable cargo (e.g., semiconductors) to be transported on the ship as well as the transportation route. Logical Logistics does not have discretion to change the identified cargo without renegotiating the contract fees.

oSee Boat is responsible for the safe passage of the cargo, as well as operation and maintenance ofSB0829. The crew determines the ship's route, speeds, and date of departure from Los Angeles. In addition, Logical Logistics cannot, under any circumstances, replace See Boat's crew.

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.