Case 4: Technology and Software development
ManyBits is a software company who entered into contract with a client C on 1 July 2015. Under the contract, ManyBits is obliged to:
Total contract price is RM55, 000.
ManyBits assessed its total cost for fulfilling the contract as follows:
As of 31 December 2015, ManyBits incurred the following costs of fulfilling the contract:
How should ManyBits recognize revenue from this contract under MFRS 18 and MFRS 15?
In: Accounting
Case 2: Manufacturing & Contract Modifications
Dell Computer, computer manufacturer, enters into contract with UPM to deliver 300 computers for total price of RM600,000 (RM2,000 per computer).
Due to necessary preparation works, UPM agrees to deliver computers in 3 separate deliveries during the forthcoming 3 months (100 computers in each delivery). UPM takes control over the computers at delivery.
After the first delivery is made, UPM and Dell Computer amend the contract. Dell Computer will supply 200 additional computers (500 in total).
How should Dell Computer account for the revenue from this contract for the year ended 31 December 20X1 if:
As of 31 December 20X1, Dell Computer delivered 400 computers (300 as agreed initially and 100 under the contract amendment).
In: Accounting
As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity).
Consider the following case of Green Caterpillar Garden Supplies Inc.:
Green Caterpillar Garden Supplies Inc. has no debt in its capital structure and has $300,000,000 in assets. Its sales revenues last year were $180,000,000 with a net income of $6,000,000. The company distributed $190,000 as dividends to its shareholders last year.
Given the information above, what is Green Caterpillar Garden Supplies Inc.’s sustainable growth rate?
0.0633755%
3.9036694%
1.97%
0.6026989%
Which of the following are assumptions of the sustainable (self-supporting) growth model? Check all that apply.
A. The firm pays out a constant proportion of its earnings as dividends.
B. The firm’s total asset turnover ratio remains constant.
C. The firm’s liabilities and equity must increase at the same rate.
D. The firm pays no dividends.
In: Finance
Which of the following is an authoritative source for statistics on IRS audits?
A. Internal revenue Manual (IRM)
B. Internal Revenue Service Data Book
C.Correspondence Audits
D. Audit Technique Guide ( ATG)
In: Accounting
Ian's Place (The REA Model and E-R Diagrams)
Ian's place sells pet supplies to dog and cat owners. To sell its products, the marketing department requires sales personnel to call on the pet store retailers within their assigned geographic territories. Salespeople have an application on their mobile phones that allows them to record sales orders and send these sales orders directly to the company network for updating the company's sales order file.
Each day, warehouse personnel review the current sales orders in its file, and where possible, pick the goods and ready them for shipment. (Ian's Place ships goods via common carrier, and shipping terms are generally FOB from the shipping point.) When the shipping department completes a shipment, it also notifies the billing department, which then prepares an invoice for the customer. Payment terms vary by customer, but most are “net 30.” When the billing department receives a payment, the billing clerk credits the customer's account and records the cash received.
Requirements
Identify the resources, events, and agents involved in the revenue process at Ian's Place. (Write a 45- to 175-word response)
In: Accounting
When should revenue and expense be recognized in the accrual basis? Provide an example
In: Accounting
What is the accrual basis of accounting? When should revenue and expense be recognized in the accrual basis? Provide an example.
In: Accounting
At 110 units of output, marginal revenue is $6, the marginal cost is $6, and the average cost is $5. If consumers demand 110 units of output when the price is $9, what is the expected profit?
In: Economics
In: Economics
The initial cost of a machine is $2,400. The machine provides an annual revenue of $750. The salvage value of the machine is $50. If the machine has a life span of 5 years, what is the rate of return on this machine? Is the machine worth purchasing if the minimum attractive rate of return (MARR) is 18% per year?
In: Economics