estimated third quarter revenues to be between $215 and $235 million. This was a $25 to $45 million decrease to the previously reported guidance Biovail released‚ which reported revenue expectations to be $260 million. A press release claimed that an accident resulted in the loss of revenue‚ but the company also stated the revenue loss from the accident was in the range of $10 to $20 million. Using Biovail’s high estimate of revenue loss and low estimate of third quarter revenue expectations still results
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E1A‚ E3A‚ E4A‚ E5A‚ E9A‚ P2 SE1. Accrual Accounting Concepts 1. Assumes expenses should be assigned to the accounting period in which they are used to produce revenues Answer: (C) Accrual Accounting 2. Assumes a business will last indefinitely Answer: (B) Continuity 3. Assumes revenues are earned at a point in time Answer: (D) Revenue Recognition 4. Assumes net income that is measured for a short period of time‚ such as one quarter Answer: (A) Periodicity E1A. Applications of Accounting
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1. Both criteria of basis revenue recognition are confirmed: Entity has substantially performed what is required in order to earn income and the amount of income can be reliably measured. Because of the problem which occurs by reading out the customers meters the company should estimate the revenues for the month December. It has many historical data about the electricity usage of its customers. For example it could relay on the experiences of the last December. Normally there are no high fluctuations
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an alternative cost allocation method. The current revenue-based cost allocation method causes inefficient resource allocation‚ resulting in excess overhead costs. It lacks consideration of each branch’s difference in cost structure and the irrelevant relationship between costs and revenues. The actual needs of different teams are not addressed. For example‚ the Operating Support Team’s traffic accident handling costs are not related to revenue. Instead‚ the number of accidents should be used as
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Prestige Data Services’ main problem is that they have too many available hours that are not generating any revenue. In the first quarter of 2003‚ they have an average of 176 available hours per month of available hours. Its operations exact a huge amount of fixed costs to cover. If they could find more commercial customers for the available capacity‚ they could increase their commercial sales revenue by as much as $140‚880 (176*800). In addition‚ they are also creating unnecessary expenses by having to
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After-sales services: A rising revenue model? Posted On May 16th‚ 2009 By Srabani Sen When Sinee Electronics shifted base from Thane to Delhi‚ it installed 16 UPS and four inverters to run its office. A popular brand‚ which provided both UPS and inverters‚ was very prompt in delivering the products and installing them. Not only that‚ the two servicemen who had visited the site to install the machines‚ spent a full day in explaining the On the other hand‚ good customer service often isn’t good
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to get a concise understanding of where problems are within the company’s operations the following factors were considered and examined: the annual percentage change in net income per common share diluted‚ net income/net revenues‚ the major income statement accounts to net revenues‚ return on stockholders? In order for Sun Microsystems to see a greater return in its bottom line assets it must consider an alternative approach of operating its organization. The following is a comprehensive view of the
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companies that specialize in a variety of services. • There is a large pool of actors and experienced directors to choose from in the market. Competitors’ Rivalry: High • There is a large number of production companies in the market that compete for revenue. • There is no loyalty from broadcasting companies. • There are no switching costs. Threats of New Entrants: High • With high usage of outsourced suppliers it is easy for them to start up enter
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Administrative expense Officers’ salaries $4‚900 Depreciation of office furniture and equipment 3‚960 Cost of goods sold 63‚570 Rent revenue 17‚230 Selling expense Transportation-out 2‚690 Sales commissions 7‚980 Depreciation of sales equipment 6‚480 Sales revenue 96‚500 Income tax expense 7‚580 Interest expense 1‚860 Instructions (a)Prepare an income statement for the year 2012 using
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recognize revenue at the point of sale based upon the time of shipment because the books are sold f.o.b. shipping point. Because of the return policy one might argue in favor of the cash collection basis. Because the returns can be estimated‚ one could argue for shipping point less estimated returns. (b) Based on the available information and lack of any information indicating that any of the criteria in FASB Statement No. 48 were not met‚ the correct treatment is to report revenue at the time
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