Return to question E3-2 (Static) Identifying Revenues LO3-2, 3-3 Revenues are normally recognized when the company transfers promised goods or services in the amount the company expects to be entitled to receive. Assume that the following transactions occurred in September: a. A popular ski magazine company receives a total of $12,345 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. b. On September 1 of the current year, a bank lends $15,000 to a company; the note principal and $1,500 ($15,000 x 10 percent) annual interest are due in one year. Answer from the bank's standpoint. c. Fucillo Automotive Group (offering a wide variety of car and truck brands) sells a Ford F-150 truck with a list, or "sticker," price of $34,050 for $32,000 cash. d. Macy's department store orders 1,000 men's shirts for $21 each for future delivery from PVH Corporation, manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hilfiger and other brand-name apparel. The terms require payment in full within 30 days of delivery. Answer from PVH Corporation's standpoint. e. PVH Corporation completes production of the shirts described in (d) and delivers the order. Answer from PVH's standpoint. f. PVH Corporation receives payment from Macy's for the events described in (d) and (e). Answer from PVH's standpoint. g. A customer purchases a ticket from American Airlines for $780 cash to travel the following January. Answer from American Airlines's standpoint. h. Ford Motor Company issues $15 million in new common stock. 1. Michigan State University receives $27,440,000 cash for 80,000 seven-game season football tickets to be played in the upcoming season. J. Michigan State plays the first football game referred to in (). k. Precision Builders signs a contract with a customer for the construction of a new $1,500,000 warehouse. At the signing. Precision receives a check for $200,000 as a deposit on the future construction. Answer from Precision's standpoint. 1. Best Buy receives inventory of 100 laptop computers from Dell; Best Buy promises to pay $60,000 within three months. Answer from Dell's standpoint. m. Amazon.com delivers a $300 lamp to a customer who charges the purchase on his Amazon.com Store Card. Answer from Amazon's standpoint. Required: For each of the transactions, if revenue is to be recognized in September, indicate the revenue account title and amount. Note: If revenue is not recognized choose "None". Answer is complete but not entirely correct. Activity Revenue Account Title Amount of Revenue Earned in September a. None b. Interest revenue S 1,500 C. Sales revenue 32,000 d. None e. Sales revenue $ 16,000 f. None 9. None h. None i. None j. Ticket sales revenue $ 70,000,000 k. None 1. Sales revenue $ 96,000 m. Sales revenue S 300