I-07.07 Problem

I-07.07 Problem - I-07.07 Zhejiang Corporation sells...

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I-07.07 Zhejiang Corporation sells customized stage lighting equipment for use in the entrainment industry. Zhejiang has a broad dealer network. One dealer, Min Chen, obtained a large contract with a ship builder to install an elaborate stage lighting system produced by Zhejiang. The new cruise ship was being promoted as the Broadway on the Water, and promised to offer the world's finest theatrical performances at sea. In 20X2, Zhejiang sold the lighting equipment to Min Chen for RMB 30,000,000. Terms were 20% cash payment, and the balance in 75 days. The extended payment terms were necessary because Min Chen needed to collect from the ship builder before being able to pay Zhejiang. Unfortunately, Min Chen experienced difficulties. It seems the floor of the stage was equipped with a sophisticated leveling system that caused it to move in counter-motion to the ship's rocking while at sea. This feature provided entertainers with a stable stage on which to perform. However, this attribute was not considered in the design of the lighting
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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