Question: What effect did Microsoft's revenue recognition policy have on its financial statements? Ignore any potential tax effects. a. Estimate the amount of revenue that Microsoft

What effect did Microsoft's revenue recognition policy have on its financial statements? Ignore any potential tax effects.
a. Estimate the amount of revenue that Microsoft would have been reported in each year from 1996 through 1999 if Microsoft had not adopted its new revenue recognition policy in1996.
b. Why do you think Microsoft decided to defer a portion of its revenues in fiscal 1996?

Step by Step Solution

★★★★★

3.45 Rating (171 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a b The companys decision to defer revenues came at a time of significant growth in revenues x sugge... View full answer

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1019-B-C-F-D-F(624).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

A Savonius rotor (see Fig. 6.29b) can be approximated by the two open half tubes in Fig. P7.96 mounted on a central axis. If the drag of each tube is similar to that in Table 7.2, derive an...

You, CA, are the senior in charge of an audit of Proctor Industries (PI), a public company in the business of selling plumbing parts wholesale. It is now November 3, 20X5five weeks after PIs year-...

Gildan Activewear Inc. is a Montreal-based company that manufactures and sells activewear, socks, and underwear. The companys brands include Gildan, Gold Toe, and Anvil. The company also manufactures...

Qantas Airways Limited is the major airline company in Australia. The company's statement of financial position (balance sheet) as at June 30, 2009, is presented below in Exhibit 4-11. In Note 1(G)...

What Effect did Microsoft's revenue recognition policy have on It's financial statements ." TEnore any potential tax Effects What effect did Microsoft's revenue recognition policy have on its...

Microsoft's Financial Reporting Strategy [HBS 9-100-027] 1. What are the factors that likely explain the difference between Microsoft's market value of equity and its reported book value of equity?...

Apple Inc.s CEO Steve Jobs announced the iPhone at a media event in January 2007. Apple released the iPhone in the US at 6 pm on Friday, June 29, 2007 to unprecedented fanfare, long queues and...

Microsofts Financial Reporting Strategy: Assume that Microsoft incurred 60% of its research and development expenses after it had established technological feasibility. The average product life was...

1.Assess the Company's current accounting policy for each type of gift card.Determine whether the policy is consistent with the revenue standard.If the policy is not, what would be the correct...

Cash LO2 BRIEF EXERCISE 10.1 Jacobs Company borrowed $1,000,000 on a one-year, percent note payable from the local bank on 1 April. Interest was paid quarterly, and the note was re- paid one year...

Good Progress SpA entered into a contract on 1.1.20X0 at a contract price of 1,000,000 and an estimated total profit of 250,000. The contract was due for completion on 31.12.20X4. The following...

What is the purpose of making adjusting entries? Your answer should relate adjusting entries to the goals of accrual accounting.

When a bond is called, the bondholder generally faces a rate of return that is lower than expected. True False

Below is a summarized income statement for St. Bruno Inc. St. Bruno Inc. Income Statement for the Year Ended December 31, 2017 Revenue............... $5,125,000 Expenses ............... 3,225,000 Net...

Jaguar Auto Company provides general car maintenance to customers. The company's fiscal year-end is December 31. The December 31, 2012, trial balance (before any adjusting entries) appears below....

Following is partial information for the income statement of Audio Solutions Company under three different inventory costing methods, assuming the use of a periodic inventory system: Required: 1....

1. Are Balogh and Dawson offering too many services? What do you advise? 2. Are Balogh and Dawson offering too low a price? What do you advise? 3. If the owners raise their prices, how do you think...

10.* The Bureau of Labor Statistics has found that the base-year expenditures of the typical consumer break down as follows: Suppose that since the base year, the prices of food and beverages have...

The mass spectra of 3-ethyl-2-pentanone and 4-methyl-2-pentanone are as follows. Explain which spectrum goes with which compound, what is the structure of the ion responsible for the peak at m/z 43...

Compounds A and B are isomers with the formula C3H6O. A has a peak at 1730 cm ?1 in its IR spectrum and B has a peak at 1715cm ?1 , the mass spectra of A and B are as follows, show the structures of...

Compounds C and D are isomers with the formula C9H12, in addition to other absorption peaks, both compounds show a peak near 7.25 ? (area 5) in their 1H-NMR spectra. Their mass spectra are as follow,...

C Its reach is from negative endlessness to positive boundlessness Mean C Middle C Mode Midrange . A 95% certainty stretch for the mean can be between preted to imply that: C if all potential...

Katy Williams is the manager of Blue Light Arcade. The company provides entertainment for parties and special events. a, Blue Light Arcade received $58 cash on account for a birthday party held two...

I have to do an annual report of Motorola solution inc. I need help with these questions Just provide all these information of the firm with some explination of each part. 1- Executive Summary The...