You are the Senior Accountant for the Patty Corporation which has several divisions. They each keep their own accounting books and have chosen the appropriate method of revenue recognition based on their operations.
Pat’s Electronics Division
Pat’s Electronics Division sells computers through agents in various cities. Agents send orders and down payments to our company. The division then ships the goods F.O.B. shipping point directly to the customers. Revenue is recognized at the point of sale.
Additional Financial Data:
Orders for fiscal year 2012 $ 3,000,000
Down Payments collected in 2012 $ 300,000
Billed and shipped in 2012 $ 2,400,000
Freight billed in 2012 $ 70,000
Commissions paid to Agents (after ship to customer) 10%
Warranty Returns as % of Sales 1%
Pickle Construction Division
The Pickle construction division was working on one project for the 2012 fiscal year. They use the percentage of completion revenue recognition method.
Contract for new administration building
Total Contract Amount $ 60,000,000
Contract Grant Date August 14, 2012
Construction Began September 1, 2012
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more