Will rate back! I just need more than a couple of sentences explaining this problem please!

The Facts

Your client, MakeMoMoney Inc., has come to you for advice. They are currently devising a plan to maximize revenues, and therefore returns, to their shareholders. Their idea is to grant very generous return provisions more generous than their competitors. They expect this will provide a competitive advantage and increase demand for their products, thereby increasing revenues. However, you caution them that depending on the terms of the transaction, recognizing revenue equal to the full sales price when sales are accompanied by loose return provisions could violate GAAP. The company CFO is dubious and insists you provide authoritative guidance to substantiate your hunch. For legal reasons, you insist that you must report your opinion in memorandum form that you will retain in your files related to MakeMoMoney.

Instructions

Write a formal business memorandum to MakeMoMoney Incs CFO, Mrs. Carol Danvers, that explains revenue recognition in the presence of the right of return. If their desired contractual returns would not result in full revenue recognition under GAAP, suggest an alternative arrangement that would result in a larger amount of revenue recognized. Be detailed in your suggestion because your client depends on you to advise them and does not want to violate GAAP, be sanctioned by the SEC, and/or sued by investors. You must use the GAAP Codification and cite references to authoritative accounting literature.