Working with the FASB Codification The FASB Accounting Standards Codification (FASB Codification) is the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (US GAAP).The codification is structured by topic, subtopic, and section with numerical references.

A school purchasing manager is seeking to buy tablets from either Entity A or Entity B and will pay shipping costs.The purchase price is $500 each.Entity A purchases the tablets from the manufacturer, Banana Industries (for $400).Entity A has the tablets shipped to its distribution center in Denver, and then ships them to schools when a sale is made.Entity A at times offers discounts to schools in accordance with its marketing strategy.

On the other hand, Entity B sells tablets from a variety of manufacturers including Banana Industries.When a sale is made, Entity B remits the proceeds to the manufacturer, and retains a 10% commission (here $50).Entity B has no discretion as to the sales price.The manufacturer then ship the equipment to the customer.

For each arrangement, indicate how much revenue and gross profit should be recognized.Provide support for your answer from the ASC and cite the applicable provisions.You should cite like this:ASC 606-10-35-3(e) so we can find what you are relying upon.You must discuss whether Entity A or Entity B is a principal or an agent and the factors that suggest control or no control.