Answer the following for APPLE INC
Income Statement
Did its revenue (or sales) increase or decrease over the last year?
Describe the company's revenue recognition policy.
Did its cost of goods sold increase or decrease over the last year?
Did its net income increase or decrease over the last year? By how much?
Balance Sheet
Did its total assets increase or decrease over the last year?
Cash Flow Statement
Did the company have a cash inflow or outflow from operating activities? What two major item(s) reported in operating activities caused the major inflow and the major outflow?
Was there total inflow or outflow of cash, what did this most relate to (Investing, Financing or Operating)?
In: Accounting
Common-Sized Income Statement
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill's data are expressed in dollars. The electronics industry averages are expressed in percentages.
Tannenhill Company |
Electronics Industry Average |
||||
| Sales | $4,000,000 | 100.0 | % | ||
| Cost of goods sold | (2,120,000) | (60.0) | |||
| Gross profit | $1,880,000 | 40.0 | % | ||
| Selling expenses | $(1,080,000) | (24.0) | % | ||
| Administrative expenses | (640,000) | (14.0) | |||
| Total operating expenses | $(1,720,000) | (38.0) | % | ||
| Operating income | $160,000 | 2.0 | % | ||
| Other revenue and expense: | |||||
| Other revenue | 120,000 | 3.0 | |||
| Other expense | (80,000) | (2.0) | |||
| Income before income tax expense | $200,000 | 3.0 | % | ||
| Income tax expense | (80,000) | (2.0) | |||
| Net income | $120,000 | 1.0 | % | ||
a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average.
| Tannenhill Company | |||
| Common-Sized Income Statement | |||
| For the Year Ended December 31 | |||
| Tannenhill Company Amount |
Tannenhill Company Percent |
Electronics Industry Average |
|
| Sales | $4,000,000 | % | 100% |
| Cost of goods sold | (2,120,000) | (60) | |
| Gross profit | $1,880,000 | % | 40% |
| Selling expenses | $(1,080,000) | % | (24)% |
| Administrative expenses | (640,000) | (14) | |
| Total operating expenses | $(1,720,000) | % | (38)% |
| Operating income | $160,000 | % | 2% |
| Other revenue and expense: | |||
| Other revenue | 120,000 | 3 | |
| Other expense | (80,000) | (2) | |
| Income before income tax expense | $200,000 | % | 3% |
| Income tax expense | (80,000) | (2) | |
| Net income | $120,000 | 1 | |
In: Accounting
For each of the following independent situations, answer the specific revenue concerns (provide authoritative support where appropriate).
1) Company A enters into a contract on February 1, 2018 to manage rental property for Company B for the next 5 years. Company A will provide all services related to the management of the property and will receive a monthly payment equal to 2% of the gross rentals from the property. Historically, property of this type in this area has averaged an 85% occupancy rate. How should Company A determine the amount and timing of revenue recognition under this contract?
2) Company A is constructing a high-rise luxury apartment building. The building will contain 80 apartments of similar size and layout. During 2018, Company A receives a deposit of $100,000 from a customer for one of the apartments. The deposit is only refundable if Company A fails to complete the building. Company A expects completion early in 2019. The remainder of the apartment’s sale price ($900,000) is due from the customer at the completion of the building when the customer can take possession. Can Company A recognize revenue in 2018 related to the contract with the customer paying the deposit?
3) Bakery A has an incentive plan that gives its customers one point for each doughnut purchased. A customer that has accumulated 15 points can receive a free doughnut. During the current year, Bakery A sold 201,600 doughnuts at $1.20 each. Bakery A expects 90% of the points to be redeemed and 105,000 were redeemed in the current year. How much revenue should Bakery A recognize in the current year related to the sale of the doughnuts and the incentive plan?
In: Accounting
How to make a Revenue Recognition memo with this information?
Background: Using Implementation Guidance Heavenly Tours Heavenly Tours (HT) was the brainchild of four college friends: Bart, Ava, Carla and Dave. They wanted to create a one-stop, high-touch, discounted tour experience for visitors to two local theme parks. Park Survival provides various simulated survival experiences. Park Adrenaline provides numerous adventures guaranteed to provide visitors with adrenaline rushes. Bart is responsible for managing the relationship with both parks and obtaining discounted admissions for HT’s customers. Ava is responsible for the tour guides, who help customize the experience for visitors. Carla is responsible for working with high-end restaurants in the area surrounding the parks to obtain discounts on food and beverages. Dave is responsible for merchandise, which can be sold to HT’s customers. Historically, HT has reported all cash collected as revenue. A private investor is requesting financial information prepared in accordance with generally accepted accounting principles before investing in HT. The investor has indicated a particular interest in HT’s total revenues. The four friends are meeting with their local accountant to discuss next steps. The accountant informs them they will need to analyze each revenue stream to determine whether HT is acting as a principal or an agent. The accountant states this determination is necessary for proper accounting treatment because when a principal satisfies a performance obligation, the gross amount of consideration is recorded as revenue; however, when an agent satisfies a performance obligation, only the amount of the fee or commission earned is recorded as revenue. Background: The accountant asked Bart to explain the relationship with both parks. Bart explained that he had been able to obtain a 15% discount from Park Survival. HT customers can access Park Survival’s website and use a discount password provided by HT. Under this agreement, HT’s customers are charged 90% of the full entrance price on their credit card when their order is accepted on Park Survival’s website. Once the order is processed on Park Survival’s website, the customer is given a pass that can be used for entrance to Park Survival and 5% is remitted to HT. The negotiations with Park Adrenaline had been more difficult because it was a newer park and in need of cash. Accordingly, HT purchased 100 passes for 90% of the face value. These passes are good for one year from the date of purchase. Any passes that are not used during the year would simply expire. HT has obtained the right to each pass purchased to provide the pass holder with access to the park. HT is free to sell these passes to its customers at any price, as long it doesn’t exceed the face value of the pass. The customer pays an agreed-upon amount when an order is accepted on HT’s website. Park Adrenaline retained the full responsibility for fulfilling its obligation to customers who entered the park with a pass purchased from HT.
ASSIGNMENT REQUIREMENTS:
Read ASC 606-10-55-36 through 40 in ASC 606, Revenue from Contracts with Customers, discussing implementation guidance for principal versus agent determination.
Review the examples in ASC 606-10-55-316 through 334F.
1. For each park, determine if HT is a principal or an agent and, accordingly, how the revenue should be recorded.
2. Prepare a professional accounting research memorandum in proper form with reference to the appropriate sections of the FASB codification.
3. In the memo provide a thorough explanation of your conclusions and the rationale behind your conclusion referencing the appropriate sections of the FASB codification.
In: Accounting
Week # Revenue Print Ad TV Ad
1 $20,000 $ 3,100 $ 4,100
2 $22,000 $ 2,600 $ 4,200
3 $18,000 $ 2,800 $ 4,500
4 $21,000 $ 3,300 $ 4,300
5 $20,500 $ 3,100 $ 4,000
6 $19,000 $ 2,900 $ 3,700
7 $17,500 $ 2,500 $ 3,500
8 $21,225 $ 2,800 $ 3,600
9 $23,148 $ 3,000 $ 4,100
10 $22,865 $ 3,100 $ 4,400
11 $18,596 $ 2,600 $ 3,700
12 $17,432 $ 2,500 $ 3,100
Determine a 95% and 99% confidence interval that the revenue will exceed $20,000. The sample proportion will come from the data given but the confidence interval should be for calculation based on a year of data.
In: Statistics and Probability
is the Variance report useful for evaluating how well revenue and coast are controlled? ch.9 managerial accounting
In: Accounting
Use the following financial information to answer the question that follows:
Deere Caterpillar
Revenue $36 billion $55 billion
Net Income $3 billion $3.7 billion
Total assets $61 billion $85 billion
Total Debt $52 billion $70 billion
Compare Deere and Caterpillar's asset use efficiency and operating efficiency. (looking for ratios)
In: Finance
| The company has two revenue centers: Retail Services and Commercial Services. There are also three service centers: Maintenance, Office Support, and Facility Support. The maintenance center supplies support to all four other centers. The Maintenance area is allocated based on maintenance work orders (Office Support: 10 work orders, Facility Support: 20 work orders, Retail Services: 25 work orders, Commercial Services: 75 work orders). The Office Support is allocated based on hours (Facility Support: 40 hours of Office Support, Retail Services: 50 hours of Office Support, Commercial Services: 200 hours of Office Support). The Facility Support is allocated based on number of customers (Retail Services: 150 customers, Commerical Services: 75 customers). Overhead rates are calculated based on the number of invoices generated (Retail Services: 40,000 invoices, Commercial Services: 10,000 invoices). | ||||||
| Allocate overhead to the two revenue centers based on the direct method, and calculate the departmental overhead rates. | ||||||
| Maintenance | Office Support | Facility Support | Retail Services | Commercial Services | ||
| Center Costs | $300,000 | $125,000 | $100,000 | $75,000 | $50,000 | |
| Maintenance | ||||||
| Office Support | ||||||
| Facility Support | ||||||
| Total | ||||||
| Overhead Rate | ||||||
| Allocate overhead to the two revenue centers based on the step method, and calculate the departmental overhead rates. | ||||||
| Maintenance | Office Support | Facility Support | Retail Services | Commercial Services | ||
| Center Costs | $300,000 | $125,000 | $100,000 | $75,000 | $50,000 | |
| Maintenance | ||||||
| Office Support | ||||||
| Facility Support | ||||||
| Total | ||||||
| Overhead Rate | ||||||
In: Accounting
venue and cash receipts journals; accounts receivable subsidiary and general ledgers Transactions related to revenue and cash receipts completed by Crowne Business Services Co. during the period April 2–30 are as follows: Apr. 2. Issued Invoice No. 793 to Ohr Co., $4,680. Apr. 5. Received cash from Mendez Co. for the balance owed on its account. Apr. 6. Issued Invoice No. 794 to Pinecrest Co., $1,990. Apr. 13. Issued Invoice No. 795 to Shilo Co., $3,450. Post revenue and collections to the accounts receivable subsidiary ledger. Apr. 15. Received cash from Pinecrest Co. for the balance owed on April 1. Apr. 16. Issued Invoice No. 796 to Pinecrest Co., $5,500. Post revenue and collections to the accounts receivable subsidiary ledger. Apr. 19. Received cash from Ohr Co. for the balance due on invoice of April 2. Apr. 20. Received cash from Pinecrest Co. for balance due on invoice of April 6. Apr. 22. Issued Invoice No. 797 to Mendez Co., $7,470. Apr. 25. Received $3,200 note receivable in partial settlement of the balance due on the Shilo Co. account. Apr. 30. Received cash from fees earned, $12,890. Post revenue and collections to the accounts receivable subsidiary ledger.
1. Insert the following balances in the general ledger as of April 1:
| 11 | Cash | $11,350 |
| 12 | Accounts Receivable | 14,830 |
| 14 | Notes Receivable | 6,000 |
| 41 | Fees Earned | - |
After completing the recording of the transactions in the journals in part 3, total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, be sure to post transactions from the revenue journal before posting transactions from the cash receipts journal.
If an amount box does not require an entry, leave it blank. In CNOW, Journal pages begin with “J”, Cash Receipts begin with “CR” and Cash Receipts begins with “R”. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.
1)create general ledger
Insert the following balances in the accounts receivable subsidiary ledger as of April 1:
| Mendez Co. | $8,710 |
| Ohr Co. | - |
| Pinecrest Co. | 6,120 |
| Shilo Co. | - |
After completing the recording of the transactions in the journals in part 3, post to the accounts receivable subsidiary ledger, in chronological order and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer's account before recording a cash receipt. If an amount box does not require an entry, leave it blank. In CNOW, Journal pages begin with “J”, Cash Receipts begin with “CR” and Cash Receipts begins with “R”. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.
2) create accounts receivable subsidiary ledger
Prepare a single-column revenue journal (p. 40) and a cash receipts journal (p. 36). Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees.
4. Using the two special journals and the two-column general journal (p. 1), journalize the transactions for April. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer’s account before recording a cash receipt.
5. Total each of the columns of the special journals and post the individual entries and totals to the general ledger. Insert account balances after the last posting.
If an amount box does not require an entry, leave it blank.
6) what is the sum of the customer balance?
7)Does the sum of the customer balances agree with the accounts receivable controlling account in the general ledger?
8)Would an automated system omit postings to a controlling account as performed in step 5 for Accounts Receivable?
In: Accounting
14 Vertical Analysis of Income Statement
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:
| Current Year | Previous Year | |||
| Sales | $544,000 | $495,000 | ||
| Cost of goods sold | 293,760 | 242,550 | ||
| Selling expenses | 97,920 | 99,000 | ||
| Administrative expenses | 108,800 | 94,050 | ||
| Income tax expense | 16,320 | 24,750 | ||
a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.
| Innovation Quarter Inc. | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31 | ||||
| Current year Amount | Current year Percent | Previous year Amount | Previous year Percent | |
| Sales | $544,000 | % | $495,000 | % |
| Cost of goods sold | 293,760 | % | 242,550 | % |
| $ | % | $ | % | |
| Selling expenses | 97,920 | % | 99,000 | % |
| Administrative expenses | 108,800 | % | 94,050 | % |
| $ | % | $ | % | |
| % | % | |||
| Income tax expense | 16,320 | % | 24,750 | % |
| $ | % | $ | % | |
b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling expenses by 2 percentage points, and administrative expenses by 1 percentage points. Thus, net income as a percent of sales by 2 percentage points.
In: Accounting