URGENT PLEASE

Question #7 Case A: Your friend is a distributor of some computer hardware. He prices his products at a cost plus a prot margin basis. The costs have been rising just like everything these days. He has maintained pretty much the same prot margin all year long. The scal year is coming to an end and he was reminded by his supplier (the manufacturer) that he didn't order the quantity they negotiated early at the beginning of the year which justied the special discount he is getting. He ordered the needed quantity to meet his target. He realized these late purchases will not be sold this year. He hopes he will sell them next year 1St quarter. End of December, the scal year end, his accountant shared with him the income statement for the year. He was shocked to nd out that his prot margin was much lower than he estimated. He asked his accountant to check his work again. The accountant came back and said everything is accurate and he pointed out that he used the average cost method for inventory as agreed. Explain to your friend what happened. ANSWER: Case B: During September, 2015, $36,000 of annual magazine subscriptions were sold by W Magazine. The subscribed magazines are delivered on the rst day of each month beginning on October 1, 2015. Required: (1) Determine the amount of revenue to be recognized during 2015 and 2016, respectively. ANSWER: Case C: Presented below is certain information pertaining to Juan Company. Assets, January 1 $240,000 Assets, December 31 230,000 Liabilities, January 1 160,000 Common stock, December 31 80,000 Retained earnings, December 31 35,000 Common stock issued during the year 20,000 Dividends declared & paid during the year 22,000 Compute the net income for the year