Construct Albert Retail Co's Pro Forma Income Statement and Balance Sheet for Years 1 to 3 under the following policies:

COGS+SG&A+Depreciation = 60% of Revenue

Dividend Payout = 50%

Current Assets = 40% of Revenue

Net Fixed Assets = 60% of Revenue

Current Liabilities = 70% of Current Assets

Corporate Tax Rate = 21%

Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 million direct subscribers (accounts) that generated revenue of $30,200 million. Costs and expenses for the year were as follows:

Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts).

a. What is Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number.
million accounts

b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar.
$ million per account

Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 million direct subscribers (accounts) that generated revenue of $54,300 million. Costs and expenses for the year were as follows:

Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts).

a. What is Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number.
million accounts

b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar.
$ million per account

Sprint Nextel is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.5 million direct subscribers (accounts) that generated revenue of $35,345 million. Costs and expenses for the year were as follows (in millions): Cost of revenue $20,841 Selling, general, and administrative expenses 9,765 Depreciation 2,239 Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place. a. What is Sprint Nextel's break-even number of accounts, using the data and assumptions given? b. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant?

Codification Research Case

Employees at your company disagree about the accounting for sales returns. The sales manager believes that granting more generous return provisions can give the company a competitive edge and increase sales revenue. The controller cautions that, depending on the terms granted, loose return provisions might lead to non-GAAP revenue recognition. The company CFO would like you to research the issue to provide an authoritative answer.

(a)What is the authoritative literature addressing revenue recognition when right of return exists?

(b)What is meant by “right of return”? “Bill and hold”?

(c)Describe the accounting when there is a right of return.

(d)When goods are sold on a bill-and-hold basis, what conditions must be met to recognize revenue upon receipt of the order?

Malibu Corporation has monthly fixed costs of $56,000. It sells two products for which it has provided the following information.

a. What total monthly sales revenue is required to break even if the relative sales mix is 30 percent for Product 1 and 70 percent for Product 2? (Round your answer to the nearest dollar amount.)

b. What total monthly sales revenue is required to earn a monthly operating income of $16,000 if the relative sales mix is 20 percent for Product 1 and 80 percent for Product 2? (Round your answer to the nearest dollar amount.)

On December 1, 2018, Shamrock Company received $5,400 from Destiny, Inc. for rent of an office owned by Shamrock Company. The payment covers the period from December 1, 2018 through February 28, 2019. Shamrock Company recorded this as Deferred Rent Revenue when it was received on December 1. The adjusting entry on December 31 would include a

A Debit to rent revenue of 2700

B Credit to rent revenue of 1800

C Credit to deferred rent revenue of 1800

D Debit to deferred rent revenue of 2700

On January 1, the Sleepy Monk Coffee Shop paid $39,000 for a full year of rent beginning on January 1. The rent payment was appropriately recorded in the Cash and Prepaid Rent accounts. If financial statements are prepared on January 31, the journal entry to record the adjustment would be:

A Debit prepaid rent and credit rent expense for 3,250

B Debit rent expense and credit prepaid rent for 39,000

C Debit prepaid rent and credit rent expense for 39,000

D Debit rent expense and credit prepaid rent for 3250

Alsup Consulting sometimes preforms services for which it receives payment at the conclusion the engagement, up to six months after service commence. Alsup recognizes service revenue for financial reporting purposes when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2020-2023 are as follows:

There are no  differences between accounting income and taxable income other than the temporary difference described above. The enacted tax rate for each year is 25%

Required:

1. Prepare the appropriate journal entry to record Alsup’s 2021 income taxes
2. Prepare the appropriate journal entry to record Alsups 2022 income taxes
3. Prepare the appropriate journal entry to record Alsups 2023 income taxes

(HINT: You will find it helpful to prepare a schedule that shoes the balances in service revenue receivable at December 31, 2020 – 2023)