S1, 2017 recognized, explain why TAKING IT FURTHER Discuss the importance of having precisely defined elements for the financial s December 31 For each of the above transactions, indicate what element(s) will be recognized (if any). If no element should be 17, FOB on the tires because criteria and prepare jour ings appro er that was packet The customer w d was included tive tires at a price of $40 per tire on August 4, 2017. The tires were delivered to Kelsee on September 18, 20 destination, and terms are n/30. No returns are expected and Kelsee does not offer a warranty one is provided by the manufacturer. The cost of the tires to Port is $20 per tire. Port is unable to collectibility of the amount from Kelsee because it is a new company, but Kelsee pays the amount in ber 4, 2017 ort Automotive Supply enters into a contract to supply Kelsee Electrocar Company with 300 automo Identify revenue full on Novem- e. Sales recorded e returned good ot returned a urns from these e exact amour g the revenue recognition criteria for the earnings approach, answer the following questions 1. When is Port's performance complete? When do the risks and rewards of ownership of the tires transfer to Instructions Kelsee? 2. Does Port have any control over the goods or continuing involvement once the tires are delivered? 3. Can this transaction be measured reliably? If so, how much is the potential revenue? 4. Is it probable that there will be an increase in economic resources to Port? oun(a) Usin ewspaper. The s that January 624 CHAPTER 1 Financial Reporting Concepts 5. Are the costs associated with the sale known? If so, how much are the costs? P1I-8A During the 2008s and 2009 global ec States could not meet their inancial commitn gives companies time to reorganize their open restructuring plan, which will allow them to c n tors are prevented 6. What is the critical event that triggers revenue recognition (b) Prepare any journal entries required to recognize revenue on the appropriate dates. TAKING-ITFURTHER incur after a sale has been concluded? One of the criteria when using the earnings approach is to determine an ated with a sale. Cost of goods sold is one cost that is associated with the sale. What other costs mi tors are prevented from taking any action agai Instruction (a) What is the potential effect on a compan b) Should companies under bankruptcy pr Identify contract components P11-6A Nicolet Publishers sells textbooks to universities across Canada. On July 10, 2017, Nicale and prepare journal entries- a contract with Hinton University to supply 300 accounting textbooks at a price of $110 per boot tion? Explain contract-based approach, September 25, 2017. The books cost Nicolet $80 each. Nicolet's return policy states that any unsol s TAKING IT FURTHER Describe the dile right of return. (10 4) returned within 90 days of delivery The books were delivered on August 25, 2017. Nicolet est of sales. Hinton returns 10 books on September 15, 2017, and 20 books on September 30, 20 imats tl pany may not be able to continue as a goirng