in the Codification. Requirement 2: What are the separate units of accounting in the sales agreement between AOI and CMI? Use the authoritative literature to explain your answer. As the explanation below illustrates‚ the multiple deliverables sold by AOI to CMI should be treated as two separate units of accounting (the assembly line system and its installation). FASB ASC 605-2525-5 presents specific criteria that must be met for the multiple deliverables in revenue-generating arrangements
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current operating assumptions. As an alternative way of looking at the forecasted funds flows‚ Mr. Mehta also prepared a forecast of cash receipts and disbursements. To prepare a financial forecast‚ Mr. Mehta would improve on various parameters. Cost of goods sold would run at 73.7 percent of gross sales - a figure that was up from recent years because of increasing price competition. Operating expenses would be about 6 percent of sales - also up from recent years to include the addition of a quality
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Shuman $1‚594. Assume that all sales personnel are on salary (no commission) and that general overhead costs are fixed. What is the dealership incremental gross profit on the total transaction (i.e.‚ new and repaired-used car sold)? For New-sales Sales of new car $14‚400 less: Cost of a new car sales $12‚240 Net new-car gross profit $2‚160 For used-car Sales of used car $7‚100 less: Cost of used car $6‚500 Service work on $1‚594 reconditioning Net used-car gross profit $(994) Dealership
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business. A manual inventory system relies heavily on the actions of people‚ which increases the possibility of human error. People might forget to record a transaction or simply miscount the number of goods. This results in needless additional orders that increase the business inventory carrying costs and use up precious storage space. Inaccurate physical counts could also result in not ordering enough of a product‚ meaning the business could run out of a crucial item at the wrong time. Keeping track
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shift in LIFO-based inventory from 70% at December 31‚ 2010 to 65% at December 31‚ 2011? A decrease in the replacement cost for Cat’s inventories‚ or an increase in the obsolescence of Cat’s older inventories could cause a decrease in the reported total value of Cat’s inventories from year to year. 2. a. What is the best estimate of the replacement cost (or current cost) of Caterpillar’s inventory as of December 2011? b. Why would the company bother to provide information about this?
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the company using group buying must divide their prices into two parts: the first part is like the gross revenue they’re given when their goods are bought‚ and the second part is for the website or the organization that runs the group buying system as the fees of using their services. November 2008‚ groupon.com was the very first offering this kind of dealing goods. It is so famous these days that people use group on as a verb‚ like google. And now‚ there are hundreds of sites offering unbeatable
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product if you own a car • High profit margin in the retail sector and especially in the used spare parts • The presence of new models and new technology • Customer loyalty is heavily present in this kind of business Cons: • Shipping cost and different currencies • Large number of dealers • Requires huge warehouses • Marketing and advertisement are not involved • Word of mouth in Lebanon could highly affect a store’s reputation • Probability of outdated inventory
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concept of responsibility accounting has emerged to accommodate the need for management information at a more specific level of detail than can be provided by financial accounting procedures. Responsibility Accounting is a method of accounting in which costs are identified with persons assigned to their control rather than with the products or function. Responsibility accounting is concerned with collecting and reporting planned and actual accounting information about the inputs and outputs of responsibility
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goals of the organization and developed a clear vision of exactly how operations will help achieve them. It involved translating the goals into implications for the operation’s performance‚ objectives‚ quality‚ speed‚ dependability‚ flexibility and cost especially at their distribution centers. Management knew inventories are considered an important asset and are critical for business success. Arrow used a lot of technology and inventory data at Arrow were extremely accurate. In order to keep inventory
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Year Ended December 31 Ending Inventory at Year-End Costs Cost Index (Relative to Base Year) 2010 $56‚160 1.04 2011 $62‚700 1.10 2012 $58‚800 1.20 2013 $76‚230 1.21 Required: Compute XYZ’s ending inventory for each of the years ended December 31‚ 2010‚ 2011‚ 2012 and 2013. Dollar Value LIFO Date of dollar-value calculation Inventory stated in current year costs Price Index Inventory stated in base-year costs Increase (decrease) Adjusted Layers Reported Ending
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