Wat you want to do Be careful--files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View Enable Editing ACCTG 331, Intermediate Accounting I Simulation #2: Revenue Recognition Mini Case REQUIRED: Given the information on the following page, please answer the required question using the revenue recognition framework we learned in the class. You can answer directly in this file and submit this file directly. GRADE RUBRIC: All students in your group will receive the same grade unless someone doesn't fully participate. PARTICIPATION GRADE: Identify any members of your group who did not fully participate in the assignment. If someone did not fully participate, identify the student and assign either 0 or 50% to their effort. Their score will be reduced accordingly. SUBMISSION: Email your completed Word document to me at psager@sdsu.edu before class on the due date. Copy all team members on the email. In the subject line, please use "ACCTG 331 Simulation 2 section W and group #". Please RENAME your file with your ACCTG331 Section Group# as well. List your team members in the body of the email and indicate the participation rate for each team member(0. 50%, 100%). here to search Market Makers, Inc. Revenue Recognition Market Makers, Inc. (MM) is a marketing company that offers a variety of marketing offerings to its customers. Specifically: MM will create a TV commercial for $1.000.000, build an app for $500.000, and build a Facebook page for $250,000. These amounts represent MM's charges for these items when MM sells them separately to customers. The TV commercial, the app, and the Facebook page are not interrelated; that is, each functions independently of the other offerings. If a customer purchases all aforementioned items together, the total cost is $1.500.000, Payment terms are 50 percent consideration due at contract signing, with the remaining 50 percent due over the rest of the development period (25 percent at mid-point 25 percent at completion) If the app is downloaded 500,000 times or more in the first month, there is a one-time bonus of $250,000 payable to MM. Stone, a customer, approaches MM with the hopes of reinventing its image to a younger customer base. Stone has a verbal agreement with MM that is based on MM's unsigned quote to Stone on November 30, 2019, for one TV commercial, one app, and a Facebook page. The agreement creates enforceable rights and obligations pursuant to MM's customary business practices. None of these items can be redirected by MM to another customer. MM performed a credit check on Stone and has determined that Stone has the intention and ability to pay MM for fulfilling its portion of the contract. Stone is required to pay MM for performance completed to date if Stone cancels the contract with MM for reasons other than MM's failure to perform under the contract as promised. Stone makes a payment on November 30, 2019, in the amount of $750,000 pursuant to the agreement. From the date of the quote, it takes MM six months to develop and produce the TV commercial, two weeks to complete the Facebook page, and three months to complete a fully functioning app. MM does not think that the app will be downloaded 500,000 times in the first month because Stone's customer base does not quickly accept newly developed technology. On the basis of its experience with similar technology, MM has determined that it takes over three months for Stone's users to begin to download its apps. LUIL I Salur 16 stay in Protected View Enable Editing Required MM's CFO is trying to understand the new revenue recognition model and has asked you to explain how MM would account for the above scenario under the new standard How should MM account for the above offering with Stone under the new revenue recognition model? Please follow the 5 steps of revenue recognition to analyze this contract in detail. Document your decision making process step by step. Quote the sentence(s) from the case that supports your decision, and cite the relevant FASB codification section(s). The most relevant standards can be found under ASC 606- 10-25 and ASC 606-10-32 You can access the FASB codification at https://aaahq.org/Research/FASB-GARS Username - AAA51809 Password - tr8T3JR a. "Identify the contract(s) with a customer." b. "Identify the performance obligations in the contract." c. "Determine the transaction price." d. "Allocate the transaction price to the performance obligations in the contract." e. "Recognize revenue when (or as) the entity satisfies a performance obligation." Wat you want to do Be careful--files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View Enable Editing ACCTG 331, Intermediate Accounting I Simulation #2: Revenue Recognition Mini Case REQUIRED: Given the information on the following page, please answer the required question using the revenue recognition framework we learned in the class. You can answer directly in this file and submit this file directly. GRADE RUBRIC: All students in your group will receive the same grade unless someone doesn't fully participate. PARTICIPATION GRADE: Identify any members of your group who did not fully participate in the assignment. If someone did not fully participate, identify the student and assign either 0 or 50% to their effort. Their score will be reduced accordingly. SUBMISSION: Email your completed Word document to me at psager@sdsu.edu before class on the due date. Copy all team members on the email. In the subject line, please use "ACCTG 331 Simulation 2 section W and group #". Please RENAME your file with your ACCTG331 Section Group# as well. List your team members in the body of the email and indicate the participation rate for each team member(0. 50%, 100%). here to search Market Makers, Inc. Revenue Recognition Market Makers, Inc. (MM) is a marketing company that offers a variety of marketing offerings to its customers. Specifically: MM will create a TV commercial for $1.000.000, build an app for $500.000, and build a Facebook page for $250,000. These amounts represent MM's charges for these items when MM sells them separately to customers. The TV commercial, the app, and the Facebook page are not interrelated; that is, each functions independently of the other offerings. If a customer purchases all aforementioned items together, the total cost is $1.500.000, Payment terms are 50 percent consideration due at contract signing, with the remaining 50 percent due over the rest of the development period (25 percent at mid-point 25 percent at completion) If the app is downloaded 500,000 times or more in the first month, there is a one-time bonus of $250,000 payable to MM. Stone, a customer, approaches MM with the hopes of reinventing its image to a younger customer base. Stone has a verbal agreement with MM that is based on MM's unsigned quote to Stone on November 30, 2019, for one TV commercial, one app, and a Facebook page. The agreement creates enforceable rights and obligations pursuant to MM's customary business practices. None of these items can be redirected by MM to another customer. MM performed a credit check on Stone and has determined that Stone has the intention and ability to pay MM for fulfilling its portion of the contract. Stone is required to pay MM for performance completed to date if Stone cancels the contract with MM for reasons other than MM's failure to perform under the contract as promised. Stone makes a payment on November 30, 2019, in the amount of $750,000 pursuant to the agreement. From the date of the quote, it takes MM six months to develop and produce the TV commercial, two weeks to complete the Facebook page, and three months to complete a fully functioning app. MM does not think that the app will be downloaded 500,000 times in the first month because Stone's customer base does not quickly accept newly developed technology. On the basis of its experience with similar technology, MM has determined that it takes over three months for Stone's users to begin to download its apps. LUIL I Salur 16 stay in Protected View Enable Editing Required MM's CFO is trying to understand the new revenue recognition model and has asked you to explain how MM would account for the above scenario under the new standard How should MM account for the above offering with Stone under the new revenue recognition model? Please follow the 5 steps of revenue recognition to analyze this contract in detail. Document your decision making process step by step. Quote the sentence(s) from the case that supports your decision, and cite the relevant FASB codification section(s). The most relevant standards can be found under ASC 606- 10-25 and ASC 606-10-32 You can access the FASB codification at https://aaahq.org/Research/FASB-GARS Username - AAA51809 Password - tr8T3JR a. "Identify the contract(s) with a customer." b. "Identify the performance obligations in the contract." c. "Determine the transaction price." d. "Allocate the transaction price to the performance obligations in the contract." e. "Recognize revenue when (or as) the entity satisfies a performance obligation