Questions from Financial Reporting

Q: Holman Electronics manufactures audio equipment, selling it through various distributors.

Holman Electronics manufactures audio equipment, selling it through various distributors. Holman’s days sales outstanding (Accounts receivable / Average daily credit sales) figures increased steadily...

Q: KEW Enterprises began operations in January 2015 to manufacture a hand sanitizer

KEW Enterprises began operations in January 2015 to manufacture a hand sanitizer that promised to be more effective and gentler on the skin than existing products. Family members, one of whom was dele...

Q: In 2017, the new CEO of Watsontown Electric Supply became concerned

In 2017, the new CEO of Watsontown Electric Supply became concerned about the company’s apparently deteriorating financial position. Wishing to make certain that the grim monthly reports he was receiv...

Q: Barrios Communications is a provider of satellite television services. It will

Barrios Communications is a provider of satellite television services. It will install a satellite dish free of charge for any customer that agrees to a one-year service contract at a price of $50 per...

Q: Posa Hotels, Inc., has a sixth night free policy.

Posa Hotels, Inc., has a sixth night free policy. Every sixth night a guest stays at the hotel is free. Because not all guests stay enough nights to earn a free stay, on average the number of free nig...

Q: Fox Photography Corporation charges $3,000 to photograph a wedding

Fox Photography Corporation charges $3,000 to photograph a wedding. Customers may print the images elsewhere or have them printed by Fox. Each wedding couple receives a coupon for $250 off the purchas...

Q: Wellington International Airport Limited is a for-profit company domiciled in

Wellington International Airport Limited is a for-profit company domiciled in New Zealand that manages the Wellington Airport and files its financial statements in compliance with IFRS. For the period...

Q: Crocs designs, develops, and manufactures consumer products from specialty resins

Crocs designs, develops, and manufactures consumer products from specialty resins. The company’s primary product line is Crocs-branded footwear for men, women, and children. It sells...

Q: On July 1, 2019, Grams Construction, Inc. agreed

On July 1, 2019, Grams Construction, Inc. agreed to construct a factory for a customer. The contract called for payments to Grams totaling $2 million. Grams has correctly determined that it is appropr...

Q: On January 1, 2019, Skinner Equipment Company leased equipment used

On January 1, 2019, Skinner Equipment Company leased equipment used in mineral extraction operations to Erickson Corporation. The monthly base rental fee was $250,000. In addition, at the end of the y...