Q. Jasmine Inc., a software vendor, delivers its product to a customer on Jan 30, 2001...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Q. Jasmine Inc., a software vendor, delivers its product to a customer on Jan 30, 2001 pursuant to a licensing arrangement that permits the customer to use the software indefinitely. The contract calls for the payment of $600,000 in 30 days and $400,000 due in 13 months. a. Calculate the amount of revenue that jasmine can recognise during each of the following periods. Justify each calculation. i. The fiscal year ending Jan 31, 2001. ii. The fiscal years ending Jan 31, 2002 and Jan 31, 2003. iii. The fiscal year ending Jan 31, 2001 if the licensing period begins on March 1, 2001. b. Assuming that Jasmine is not involved with its customer's financing arrangements, explain how your answers to (a) above would change if the customers paid in advance of the scheduled payments. c. Explain whether Jasmine's ability to recognise revenue would change if, on Jan 30, 2001, it transfers without recourse, the rights to receive all payments to an unrelated party. d. Assuming that Jasmine participated in a customer's financing arrangement with an unrelated party and received payment in advance of the contractual terms, i. Explain whether Jasmine can recognise revenue on receipt of payment. ii. Describe the income statement and balance sheet impact of the payments received. Q. Jasmine Inc., a software vendor, delivers its product to a customer on Jan 30, 2001 pursuant to a licensing arrangement that permits the customer to use the software indefinitely. The contract calls for the payment of $600,000 in 30 days and $400,000 due in 13 months. a. Calculate the amount of revenue that jasmine can recognise during each of the following periods. Justify each calculation. i. The fiscal year ending Jan 31, 2001. ii. The fiscal years ending Jan 31, 2002 and Jan 31, 2003. iii. The fiscal year ending Jan 31, 2001 if the licensing period begins on March 1, 2001. b. Assuming that Jasmine is not involved with its customer's financing arrangements, explain how your answers to (a) above would change if the customers paid in advance of the scheduled payments. c. Explain whether Jasmine's ability to recognise revenue would change if, on Jan 30, 2001, it transfers without recourse, the rights to receive all payments to an unrelated party. d. Assuming that Jasmine participated in a customer's financing arrangement with an unrelated party and received payment in advance of the contractual terms, i. Explain whether Jasmine can recognise revenue on receipt of payment. ii. Describe the income statement and balance sheet impact of the payments received.
Expert Answer:
Answer rating: 100% (QA)
a In the present case the software is delivered to the client on Jan 30 2001 and the payment is expected to be received in two installments 1 600000 i... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1259548185
8th edition
Authors: David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
Students also viewed these accounting questions
-
Explain how your answers to Test Yourself Question 5 would differ if each of the assumptions changed. Specifically, what sorts of changes in the assumptions would weaken the effects of monetary...
-
Refer to Problem 14-45. Explain how your answers would change for each independent situation indicated below: In problem 14-45 Holly funded the Holly Marx Trust in January 2015. The entire trust...
-
Refer to Problem 14-45. Explain how your answers would change for each independent situation indicated below: a. At the end of the trust term, the property passes instead to Holly's nephew. b. Holly...
-
Show that the allocation which solves the first-order condition from Eq. (3.7) for a social optimum satisfies the second-order conditions. Equation 3.7 -C(e) = D'(E) i=1,.... (3.7)
-
What is an authoritative page? What is a hub? What is the difference between the two?
-
Two sides of a triangle have lengths 12 m and 15 m. The angle between them is increasing at a rate of 2o/min. How fast is the length of the third side increasing when the angle between the sides of...
-
Determine the missions amounts. Unit Selling Price Unit Variable Costs Contribution Margin per Unit Contribution Margin Ratio $250 $160 (a) 2. (b) 36% $500 (c) $150 3. (e) (1) 20 RHU $360 (d) 30%
-
Depreciation information for Corales Company is given in BE10-3. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and...
-
8 The given by a) Find SM of n term of a certain series is S = (-1)^-1 4,--3 42=3 the first three terms of the series. u= b) Show that the terms of the series are in geometric progression.
-
The date is January 10, 2023, and Maryton Hotels CFO George Smith is looking with dismay at his companys financial performance during 2022. Already facing stiff competition from other hotel chains as...
-
On October 5, Culver Corporation buys merchandise for resale onaccount from Pronghorn Corporation. The selling price of the goodsis $5,500, and the cost to Pronghorn Company is $2,960. On October8, 2...
-
Sifton Electronics Corporation manufactures and assembles electronic motor drives for video cameras. The compan assembles the motor drives for several accounts. The process consists of a lean cell...
-
1. What is the retrospective payment system that was most prevalent in long-term care reimbursement? How has the transition away from retrospective payments to influenced the delivery of care? What...
-
On a certain date, 2 hours before local noon, a 4 cm long toothpick makes a 4.4 cm shadow at an azimuth of 301. What will be the azimuth of a shadow cast 2 hours after local noon?
-
Sunland Company manufactures two products, Mini A and Maxi B. Sunland's overhead costs consist of setting up machines- $740000; machining- $2000000; and inspecting- $630000. Information on the two...
-
Anthropomorphic elements generally are not acceptable to include in predictions regarding animal behavior. Which two predictions below include anthropomorphic elements?
-
An individual owns 40% of the stock in an S corporation, and the individual's spouse owns 30% of the stock. The tax year is the calendar year. The corporation reports $104,000 of ordinary taxable...
-
Assume that your audit team has established the following parameters for the examination of ELM's sales transactions: LO G-3 Risk of incorrect acceptance...
-
Access the FASB Accounting Standards Codification at the FASB website (asc.fash.org). Determine the specific citation for each of the following items: 1. What is the balance sheet classification for...
-
Distinguish between the revenue/expense and the asset/liability approaches to setting financial reporting standards.
-
At March 13, 2017, the Securities Exchange Commission is in the process of investigating a possible securities law violation by Now Chemical. The SEC has not yet proposed a penalty assessment. Now's...
-
a) Calculate the absolute difference and relative difference from this data. Sales Food Beverage Total Absolute Relative Year 1 Year 2 difference difference % 678,950 787,582 378,450 280,053...
-
What is the cash operating cycle and how is it calculated?
-
What are the key elements of working capital?
Study smarter with the SolutionInn App