ZuoTi.Pro
Question

Ultima Company offers its customers discounts to purchase goods and take title before they actually need...

Ultima Company offers its customers discounts to purchase goods and take title before they actually need the goods. The company offers to hold the goods for the customers until they request delivery. This relieves the customers from making room in their warehouses for merchandise not needed yet. The goods are on hand and ready for delivery to the buyer at the time the sale is made. Ultima Company pays the cost of storage and insurance prior to shipment. Customers are billed at the time of sale and are given the normal credit period (90 days) to pay.

Required:

Determine whether Ultima Company should recognize revenue from the sale of goods at the time title passes to the customer or whether it should defer revenue recognition until the goods are delivered to the customer.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Revenue Recognition Ac to the pmovfslon kevenue should be Recognised uhentt condkng s of UsCAAP D Realised on 2. to be Received) rrm ho bacause p et wan ted Though Puchasen hot yat woni but he veny b unchoue -ナthen oto rg So, thee Thatk bwhy Sale Should be. bdA Completodommen

0 0
Add a comment
Know the answer?
Add Answer to:
Ultima Company offers its customers discounts to purchase goods and take title before they actually need...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Which of the following would not be considered a revenue recognition abuse? Multiple Choice Recording goods on layaway...

    Which of the following would not be considered a revenue recognition abuse? Multiple Choice Recording goods on layaway for a customer as a final sale. Recording revenue on a large shipment to a customer whose ability to pay is not reasonably assured. Recording goods on consignment as part of inventory when there is a right of return. Recording revenue on goods ready for delivery to the customers, segregated in the company warehouse without a bill-and-hold arrangement in the contract.

  • Question Help Know-it-all is a company that provides cellular phone sales and services. The company offers...

    Question Help Know-it-all is a company that provides cellular phone sales and services. The company offers different packages to suit different customers. For example, for one model of phone, the Cranberry 403, the company gives its customers the following options Click the icon to view the options.) Required a. Determine the amount and timing of revenue that know-it-all should recognize if a customer chooses Option A. Repeat for Options B and C. (You may ignore the time value of money...

  • Travis Company has just completed a physical Inventory count at year-end, December 31 or the current...

    Travis Company has just completed a physical Inventory count at year-end, December 31 or the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to 565,700. During the audit, the independent CPA developed the following additional Information: a. Goods costing $870 were being used by a customer on a trial basis and were excluded from the inventory count at December 31 of the...

  • 1.Under a consignment arrangement, revenue is not recognized until the consigned goods are sold to a...

    1.Under a consignment arrangement, revenue is not recognized until the consigned goods are sold to a third party. True or False 2. Amounts received from the sale of gift cards should be recognized by the seller at the time of sale.--True or False 3. Ann Smith just saw her doctor. After the appointment, she was informed by the receptionist that the fee for the visit is $75 and that her insurance company will be billed for the visit. Ann was...

  • Travis Company has just completed a physical Inventory count at year-end, December 31 of the current...

    Travis Company has just completed a physical Inventory count at year-end, December 31 of the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to $65,700. During the audit, the independent CPA developed the following additional Information a Goods costing $870 were being used by a customer on a trial basis and were excluded from the inventory count at December 31 of the...

  • P7-1 (Algo) Analyzing Items to Be Included in Inventory L07-1 Travis Company has just completed a...

    P7-1 (Algo) Analyzing Items to Be Included in Inventory L07-1 Travis Company has just completed a physical inventory count at year-end, December 31 of the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to $67,000. During the audit, the independent CPA developed the following additional information: a. Goods costing $810 were being used by a customer on a trial basis and were...

  • Pharoah Company sells goods that cost $295,000 to Ricard Company for $446,000 on January 2, 2017....

    Pharoah Company sells goods that cost $295,000 to Ricard Company for $446,000 on January 2, 2017. The sales price includes an installation fee, which has a standalone selling price of $42,000. The standalone selling price of the goods is $404,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entry (if any) to record the sale on January 2, 2017. (Credit account titles are automatically indented when amount...

  • Topic: Revenue Recognition Medical Devices Inc. is a public company that trades its securities on the...

    Topic: Revenue Recognition Medical Devices Inc. is a public company that trades its securities on the American Stock Exchange. The company needs to increase sales in the month of December by $3 million. Management has determined that the company has products available to ship to customers prior to year-end. Medical Devices’ CEO calls three specific customers and convinces each customer to order $1 million worth of products, which Medical Devices delivers prior to year-end. In reviewing Medical Devices’ normal and...

  • Sale of Custom Merchandise Custom Wares is a public company that sells custom merchandise, including engraved...

    Sale of Custom Merchandise Custom Wares is a public company that sells custom merchandise, including engraved picture frames. On December 15, the company received a purchase order and payment from a customer (Jim Burke) for the purchase of 200 custom frames. The frames will be used as a wedding favor and engraved "Jim and Jess, 2020." On December 30, Custom Wares shipped the completed order to Mr. Burke, and Mr. Burke received the frames via UPS on January 2. Company...

  • Revenues are normally recognized when a company transfers promised goods or services to customers in the...

    Revenues are normally recognized when a company transfers promised goods or services to customers in the amount the company expects to be entitled to receive. Expense recognition is guided by an attempt to match the costs associated with the generation of those revenues to the same time period. Assume that the following transactions occurred in January: a. McGraw-Hill Education uses $2,767 worth of electricity and natural gas in its headquarters building for which it has not yet been billed. b....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT