4011 APRIL 7‚ 2009 CRAIG CHAPMAN Biovail Corporation: Revenue Recognition and FOB Sales Accounting Background Late on October 9‚ 2003‚ David Maris‚ an analyst at Banc of America Securities (BAS)‚ was trying to interpret the shocking events of the previous few days and finish the write-up of his first report on the Canadian pharmaceutical firm‚ Biovail Corporation. Maris didn’t like what he saw at the company‚ but he never liked writing “Sell” recommendations. In any event‚ he wanted to make
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Salaries paid for services rendered (90‚000) (100‚000) Utilities (30‚000) (40‚000) Purchase of insurance policy (60‚000) -0- Net operating cash flow $(20‚000) $50‚000 Income Statement Year 1 Year 2 Revenues $170‚000 $220‚000 Expenses: Salaries (90‚000) (100‚000) Insurance Policy (20‚000) (20‚000) Utilities (35‚000) (35‚000) Total Expenses (145‚000) (155‚000) Net Income $25‚000 $65‚000
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(FFP) benefits represents a significant liability on every major U.S. airline’s balance sheet. Major U.S. airlines employ one of two methods to account for the liabilities they incur when issuing mileage credits to traveling passengers. The Deferred Revenue Method recognizes a liability for the fair value of the outstanding mileage credits (with “fair value” defined under International Financial Reporting Standards (IFRS) as “the amount for which the award credits could be sold separately”). The Incremental
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Equity 2952 3243 Total Liabilities & Shareholders’ Equity 6383 6729 Total Revenues 9779 10281 Cost of Sales 8165 8727 Gross Revenue 1614 1554 Depreciation 278 278 Amortization of Goodwill 343 343 Selling‚ general & administrative expenses 430 485 Provision for income taxes 163 157 Net Revenue 400 291 1992 1993 Acid Test Ratio Cash‚ Marketable Sec‚ Prepaid Exp 1240
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COMPARE FINANCIALLY? YEARLY REVENUE‚ GROSS MARGIN‚ REQUIRED INVESTMENT AND PROFIT POTENTIAL. WHAT ARE THE STRATEGIC ADVANTAGES AND RISKS OF EACH OPTION? CHANNEL MANAGEMENT‚ CONFLICT ISSUES INVOLVED. The Problem Natureviews main problem is that they have to make strategic marketing decisions to grow revenues to $20‚000‚000 from their current $13‚000‚000 before the end of the 2001fiscal year. Channel Analyses Supermarket channel offers more potential for sales and revenue but also is very costly
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Company‚ Salem Data Services Accounting Analysis Salem Telephone Company recently established Salem Date Services‚ a computer service subsidiary of the telephone company. The new subsidiary was established in efforts to earn the company increased revenues in order to relieve pressure to increase rates for the regulated telephone company. Salem Data Services accounting has shown profit loss for the subsidiary over the past three months. Peter Flores‚ president of Salem Telephone Company‚ is preparing
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Jeremy Barker Accounting 201-001 Prof Abavana 9/17/12 CA1-18 a) The ethical issue is the corporate reporting department is not recording the late entries and reporting incorrect numbers on purpose. b) Troy Normand is acting immorally because as a manager he is not making sure that the numbers are being recorded correctly. c) I would have done what a manager supposed to do and make sure the numbers and late entries are being recorded correctly. d) The major stakeholders are the
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reported a marginal 6% growth in its consolidated revenues to Rs. 216.55 crore in Q2CY’12 compared to Q2CY’11 while it’s bottom-line fell 2% to Rs. 43.70 crore which was lower than expectation. Growth in income was contributed by 7% growth in rating services revenues at Rs. 90.70 crore contributing 42% of total revenues and 10% growth in research services revenues at Rs. 113.28 crore contributing 52% of total revenues. Advisory services revenues fell 22% to Rs. 12.29 crore. Consolidated other
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The accounting firm of Howe and Wen‚ CPAs‚ has served as the Bees auditors for the past five years. One of the major audit areas involves testing ticket revenues. The revenues reached nearly $1.9 million in 2010. In prior years‚ the audit plan called for extensive detailed testing of revenue accounts to gain assurance that reported ticket revenues were fairly stated. Nadine Mercil‚ a new audit manager‚ just received the assignment to be the manager on the 2011 audit. Nadine worked previously on the
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industry powerhouse‚ its 20% return on equity (ROE) lags behind that of Sears’ 22%. Analysis: Wal-Mart operates fewer stores than Sears but is ahead in terms of total selling area by a ratio of 3.4:1. Between 1995 and 1997‚ Sears’ retail store revenue per selling square foot was not only lower than that of Wal-Mart but in decline. Sears allows customers to pay for merchandise over time if they use the company’s proprietary credit card. Sears opened 24 million new credit card accounts over a
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