Business, 24.09.2021 22:40 crodriguez87
You have recently been hired as an assistant controller for Stanton Temperton Corporation, which rents building space in major metropolitan areas. Customers are required to pay six months of rent in advance. At the end of 2021, the company's president, Jim Temperton, notices that net income has fallen compared to last year. In 2020, the company reported pretax profit of $330,000, but in 2021 the pretax profit is only $280,000. This concerns Jim for two reasons. First, his year-end bonus is tied directly to pretax profit. Second, shareholders may see a decline in profitability as a weakness in the company and begin to sell their stock. With the sell-off of stock, Jim's personal investment in the company's stock, as well as his company-operated retirement plan, will be in jeopardy of severe losses. After close inspection of the financial statements, Jim notices that the balance of the Deferred Revenue account is $120,000. This amount represents payments in advance from long-term customers ($80,000) and from relatively new customers ($40,000). Jim comes to you, the company's accountant, and suggests that the company should recognize as revenue in 2021 the $80,000 received in advance from long-term customers. He offers the following explanation: 'First, we have received these customers' cash by the end of 2021, so there is no question about their ability to pay. Second, we have a long-term history of fulfilling our obligation to these customers. We have always stood by our commitments to our customers and we always will. We earned that money when we got them to sign the six-month contract.' (Spiceland 2019) Reply to the following: 1. What are the effects on pretax profits of reporting the $80,000 as Service Revenue? 2. Instead of reporting the $80,000 as revenue, how else might you report this amount? 3. Are investors and creditors potentially affected by Jim's suggestion? 4. As a staff employee, should you follow Jim's suggestion? Why or why not?
Answers: 3
Business, 21.06.2019 21:00
Captain john's yachts, inc., located in fort lauderdale, florida, rents three types of ocean-going boats: sailboats, cabin cruisers, and captain john's favorite, the luxury yachts. captain john advertises his boats with his famous "you rent"we pilot" slogan, which means that the company supplies the captain and crew for each rented boat. each rented boat has one captain, of course, but the crew sizes (deck hands, galley hands, etc.) differ. the crew requirements, in addition to a captain, are one for sailboats, two for cabin cruisers, and three for yachts. ten employees are captains, and an additional 18 employees fill the various crew positions. currently, captain john has rental requests for all his boats: four sailboats, eight cabin cruisers, and three luxury yachts. if captain john's daily profit contribution is $50 for sailboats, $70 for cruisers, and $100 for luxury yachts, how many boats of each type should he rent?
Answers: 2
Business, 22.06.2019 03:00
If you were running a company, what are at least two things you could do to improve its productivity.
Answers: 1
Business, 22.06.2019 17:30
Betty contracted with scooby’s skate store to deliver a pair of skates to jake for his birthday. scooby’s owner was going on a trip and delegated the delivery of the skates to brian. brian failed to make delivery.can jake sue brian for breach of contract, as he was not a party to the original contract? explain your answer. brian was not a party to the original contract. why would a court hold him responsible for failing to make delivery? if you do not think a court would hold him responsible, explain your answer. can jake sue scooby’s skates for breach of contract? explain your answer.
Answers: 2
You have recently been hired as an assistant controller for Stanton Temperton Corporation, which ren...
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Social Studies, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Chemistry, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Biology, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Arts, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Social Studies, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01
Mathematics, 14.09.2020 20:01