What three conceptual factors affect the decision as to when to recognize revenue.

What are the three revenue recognition alternatives?

Under what circumstances does a company recognize revenue prior to the completion of the earnings process?

Under what circumstances does a company use the percentage of completion method for long term contracts?

How may the departure from the principle of recognizing revenue only at the completion of the earnings process be justified when a company uses the percentage of completion method.

Describe input ad output measures used in the percentage of completion method. Give an example of each.

How does a company account for losses under the two methods of accounting for long term construction contracts?

How does a company classify the following accounts in its financial statements: Construction in Progress, Partial billings, Construction Revenue, and Construction Expense?

Describe the difference between the cost recovery method and the installment method of revenue recognition.

When a contract has multiple elements (multiple deliverables), how does GAAP determine if one of the elements should be considered a separate unit of accounting?

Distinguish between the initial franchise fee and continuing franchise fee. When is each recognized as revenue?

How is revenue recognized for real estate sales?

In a consignment, does consignee or consignor retain title to the property? When is revenue recognized by the consignor? The consignee?

On Monday, May 15, 2017, you bought (traded) the XZX, Inc. 8.25% corporate bonds with a trading value of $96.50 price. The coupon payments are paid on March 31 and September 30. Using the 360-day accrual basis, calculate the invoice price of the bond. Please use T+3 to calculate the settlement day (use 2 decimals)

Tesla Inc. is traded at $480.01 per share when Nancy sold a call option today. The call premium is $86 and the exercise price is $500. The option will be expired on August 21, 2020.

1. What are Nancy’s maximum profit and maximum loss?
2. Show the profit/loss if, at the expiration date, the Tesla price is (1) $400, (2) $530, (3) $700 ?

"The characteristics of two stocks traded in the economy are as follows: Stock A, expected return=13%, standard deviation=60%; Stock B, expected return=8%, standard deviation=40%. Correlation between A and B is -1. If the market risk premium is 4%, what is the expected return for a portfolio with a beta of 3 in a CAPM universe?"

15%

18%

22%

None of the above

Chapters 10-11, revenue and receivables process.  

1. Pick a company and learn about the different ways the company earns revenue.   You can look through the company’s website, 10K or annual reports for information. (The bigger companies have more interesting stuff you get to learn.)

2. Share at least two different revenue streams from that company and explain how each revenue stream goes all the way from order to cash. Make sure that you are demonstrating that you have read and understand the concepts of the book. The goal is to apply what you have learn in the textbook to a real company.

Question No 3. Tests Using Contingency Tables:

A researcher selected sample of customs from 4 companies and asked them if the companies care give warranty on sold items or not. Assume observed values from your own (fill the below table by assuming any values of your choice) and test the claim that the proportion of customers of each company who got warranty is the same for each company by choosing alpha of your own choice.  (Marks 2.5)

1. Find the quotient and remainder when 74 is divided by 13.

2. Use the Euclidean Algorithm to find the GCD of 201 and 111.

3. Express your answer to #2 as a combination of 201 and 111.

4. In Z₇ compute the following: a. 4+6, b. 4^. 6, c. 3⁵.

On the way to lower floors, an elevator begins its descent from rest at a constant acceleration, ascending the first 0.5 m in 0.85s. What is the apparent weight of a 75 kg man inside the accelerator during this time interval?

.1 kn

.18 kn

.74 kn

.3 kn

A sociologist interested in salesperson-consumer interaction wanted to know if customers really are influenced to buy more from sales clerks who smile. To test this, clerks at eight stores in a large Canadian clothing chain were given special instructions at the start of a week, and the number of sales over the week were recorded. Four of the stores were randomly selected to have the clerks receive instructions to be especially courteous and to smile a lot. Clerks at four other stores were simply instructed to be especially courteous. Sales (in thousands of dollars) for the four stores in the smile condition were 36, 40, 36, and 44; sales for the four stores in the control condition were 40, 31, 27, and 30. Do these results suggest that customers might buy more if they encounter smiling sales clerks? (Use the .05 level.)

Choose the appropriate test and use the five steps of hypothesis testing.

The trial balance columns of the worksheet for Cullumber Company at June 30, 2020, are as follows.

Other data:

Complete the worksheet.