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I need help in a revenue recognition Questions! Q...

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I need help in a revenue recognition Questions! Question 1: Pat's Electronics Division sells computers through agents in various cities. Agents send orders and down payments to our company. The division then ships the goods F.O.B. shipping point directly to the customers. Revenue is recognized at the point of sale. Additional Financial Data: Orders for fiscal year 2012 $ 3,000,000 Down Payments collected in 2012 $ 300,000 Billed and shipped in 2012 $ 2,400,000 Freight billed in 2012 $ 70,000 Commissions paid to Agents (after ship to customer) 10% Warranty Returns as % of Sales 1% Question 2: Peace Book Distribution Division Our book distribution division sells to national bookstores. Our division allows for up to 25% of sales in returns. For the past 4 years, returns have averaged 20%. We record revenue based on revenue recognition when the right of return exists. Total Sales for 2012 $ 9,000,000 Sales Still Available for return for six months $ 2,000,000 Actual Returns on Sales not returnable 21% 2011 Sales collected in 2012 $ 2,500,000 2011 Sales returned in 2012 19% For Both Questions, please Calculate the revenue to be recognized in fiscal year 2012 for each of Patty Corporation in accordance with generally accepted accounting principles. Show all calculations in excel. Thank you

 

Paper#4872 | Written in 18-Jul-2015

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