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Only need 3-4 page limit to answer all questions;Use your own words;Don?t plagiarize from solution manual or other source;Make citation if need;Simple sentence;Coconut TelegraphCorporation (Coconut) is a developer and provider of specialized customer billings and management software and systems.Coconut?s flagship product, the VolcanoSystem, is a customer billings and management system consisting of integrated hardware (user interfaces and consoles) and related software. Coconut has never sold, nor does it offer to sell, the Volcano System without the software since the software is necessary for the Volcano System to function as intended.;On February 1,2012, Coconutentered into an arrangement with BuffettWorldwideInc. (Buffett), a restaurant servicer,to deliver the VolcanoSystem andprovide one year of postcontract customer support (PCS)beginning March 1,2012.Buffett paid$12,000on February 1, 2012,for the Volcano System and the related PCS.The PCS includes telephone support, repair or replacement of defective parts, any available software updates, and any necessary bug fixes for the software.There is no general rightof return on the arrangement. Coconutdeterminedthatthe arrangement consists of the following twounits of accounting with the respective standalone relative selling prices;1. Customer management system $12,000 2. One year of PCS 2,000;On May1,2012,and in a separate contract, Coconutagreed to provide Buffett with (1) training services on the customer management systemand (2) an additional year of PCS. Under the terms of this agreement, Buffett immediately paid considerationof $4,500 for theadditional services.Coconut determined that the standalone relative selling price of the training services and additional PCS were $3,000 and$2,000, respectively.At the time of execution of this agreement, the customer management system had been delivered and all other revenue recognition criteria related to the system were met.The training services are scheduled to begin on June 1, 2012.;Required;1. IsCoconut?s February 1, 2012,arrangement with Buffettwithin the scope of ASC 985-605? 2. On the basisof the response to Question1, discuss the revenue recognition accounting literature that would be applied to each unit of accounting in the February 1, 2012,arrangement.Provide the cumulative revenue recognized and deferred revenue balance related to the Buffettarrangement as of April 30, 2012. 3. Should the February 1, 2012,agreement and the May 1, 2012,agreement be accounted for separately or as a single arrangement? 4. On the basis of the response to Question 3,how should Coconut account for the execution of the May 1, 2012,agreement?Provide the deferred revenue balance and cumulative revenue recognized related to the Buffettarrangement upon execution of theMay1, 2012,agreement.


Paper#75054 | Written in 18-Jul-2015

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