Solutions - Revenue Recognition CHAPTER 6 E 6-1. Revenue...

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Unformatted text preview: Revenue Recognition CHAPTER 6 E 6-1. Revenue Recognition 1. Air Canada advance ticket sale—revenue recognized in December 2. Furniture sale--If (1) collection can be reasonably assured and (2) an estimate of uncollectible amounts can be made , then revenue can be recognized at the point of sale* .--Alternative: the instalment method must be used with gross profit being recognized at the time cash is collected . --However, it is highly unlikely that Leon’s would sell to customers with no credit check and that it would not be able to reasonably estimate its doubtful accounts based on past experience. E6-1. Revenue Recognition 3. All season tickets—NOT earned yet; recognized on a per game basis over the season from April to October. 4. TD loan in April, repayable in Nov--Interest revenue should be accrued and recognized by TD Canada Trust evenly over the term of the loan . 5. College tuition--Once the term starts , tuition can be recognized provided that material expenses can be determined and matched (convenience)....
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This note was uploaded on 04/10/2009 for the course MANG MGCR 352 taught by Professor Zlou during the Spring '09 term at McGill.

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Solutions - Revenue Recognition CHAPTER 6 E 6-1. Revenue...

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