ORIE 350 lecture 4 - ORIE lecture 4 Handout: Homework 2 In...

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mulated depreciation of building(XA) (contra-asset) 0 Building(A) 240, 000 Office supplies(A) 2,200 3,600 ?=4, 400 1400(ending balance) Cost of goods sold(TSE) expenses 24, 800 Sales Revenue(TSE) 49, 000 Selling expenses(TSE) 11, 500 Selling expenses(TSE) 2,000 neral and Administrative expenses(TSE) 600 Retained Earnings(SE) 8,400 5,100 13, 500 = L end - L start +SE end - SE star - NCA end +NCA start ΔC = ΔL + ΔSE- ΔNCA ORIE lecture 4 Handout: Homework 2 In class exercises 1. Adjusting entries 2. Closing entries 3. Revenue recognition Rules for revenue recognition 1. Persuasive evidence of an arrangement exists. Generally a purchase agreement or a contract 2. Delivery of the goods to the buyer has occurred or the services have been rendered 3. The seller’s price to buyer is fixed and determinable 4. Collectibility is reasonably assured Sales on account-> yes Sale on Layway-> no, does not count in revenue in accounts, when goods are sold in real price then the revenue is recognized. Until goods are transferred to customers, deposits are not counted.
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ORIE 350 lecture 4 - ORIE lecture 4 Handout: Homework 2 In...

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