Question

Dominum Corporation is a mining company that mines, produces, and markets teledine, a common mineral substance. The mineral is mined and produced in one large batch per year, as the mine is accessible only for a brief period in the summer due to severe weather conditions at the mine site. Dominum has an advance purchase contract with one customer that takes all of Dominum’s output each year. The agreement allows the customer to return product that is defective for up to 60 days from the date of delivery. Transactions in 20X6 were:


Required:
1. Assess the five steps for revenue recognition and determine when the performance obligation is complete.
2. Prepare all the journal entries to record these events assuming the critical event is at the point ofdelivery.


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  • CreatedFebruary 17, 2015
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