Question: There is a mini case below, please state the financial reporting error and provide a solution. The industry standard for shoe returns is 20 days,

There is a mini case below, please state the financial reporting error and provide a solution.

The industry standard for shoe returns is 20 days, subject to a 10% restocking fee. NIKE is using these same terms for the new super shoes At December 31, 2019 there were $500,00 sales of these shoes that were still under the refund return period. NIKE only started selling these shoes in October of this year and as such still does not have an estimate of the amount of returns. Currently, no accounting has been done regarding potential returns of these lights.

What is the financial reporting error? Please provide a solution to this error.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

There is a mini case below, please state the financial reporting error and provide a solution. The industry standard for shoe returns is 20 days, subject to a 10% restocking fee. NIKE is using these...

I would highly appreciate your kind answers to the questions includedin the attached case study which was provided by my financial accouting professor. thank you. ISSUES IN ACCOUNTING EDUCATION Vol....

(1) The Quality of Financial Information Referencing this week?s readings and lecture, describe the quality issues related to reporting revenue. What is the importance of understanding various...

Please find attached assignment and see if you can help me in that and provide me the main points (in the article of spencer and web (2015) as attached) that need to be criticized, also I need an...

CHAPTER ONE INTRODUCTION 1.1 Background to the Study Auditors are the third pair of eyes for people who use financial statements ( Uzuh,2008). The audit provides users of the financial statements...

Does anyone know where this article come from? I wanna cite it as a resource!! Thanks! 41 Auditing Insurance Companies 41.1 OVERVIEW OF THE INDUSTRY (a) Structure of the Industry, (b) Reinsurance,...

For Question 1 read the questions then answer them first using IASB Concepctual Framework 2010 then answer them a second time using FASB?s Conceptual Framework statement. (QUESTION 1 HAS TO BE...

From the case study, create an argument for the use of principles-based accounting for leases over rules-based accounting under GAAP, based on the financial statement restatements in the restaurant...

A business has compiled the following information for the year ended 31 October 20X2: Opening inventory Purchases Closing inventory The gross profit as a percentage of sales is always 40% $ 386,200...

The transactions completed by Sure N' Safe Courier Company during July 2012, the first month of the fiscal year, were as follows: July 1. Issued Check No. 610 for July rent, $7,500. 2. Issued Invoice...

Which of the following could be a source of working capital for the newly inaugurated community clinic established and operated by the City of Pasadena, California, and which mainly serves the...

What were your five main take - aways from this class? I know you are not where you were when you came in 7 weeks ago your thought process about technology trends and leadership has probably changed....

What are the possible long-term consequences for Janines employment status?

What are the steps in the T&D process?

Define training and development.