Revenue from contracts with customers

  

Revenue  From Contracts With Customers Examples

Part I: For each of the scenarios determine if a contract exists by applying the 5 requirements for a contract to exist under ASC 606. 

1.  For each of the following independent situations determine if a contract exists as of January 31st, 2018 by Anderson Corporation. Assume Anderson is a publicly traded company with a calendar fiscal year. 

a.   A regular customer of Anderson’s always places an order on the last day of the month, but did not do so in January. Anderson is certain it will because the customer’s purchasing agent was ill and that the order will be received when she returns. In fact, the order is received by fax in early February, with an apology from the customer’s purchasing manager and a note requesting that Anderson “expedite shipment of the January order.” 

b. One of Anderson’s customers calls on January 29th and gives Anderson a list of goods it intends to buy, but with the caveat that the order is subject to approval of the purchasing manager, who will not be in for several days. The order is received by fax on February 4th when the purchasing manager returns. 

c. One of Anderson’s customers calls and gives Anderson an order. Anderson typically receives orders by fax and asks the customer to confirm the order by fax, which it does on Feb.2nd

d. Anderson and one of its customers agree that Anderson will sell it certain goods, but that the price will depend on the price of oil two weeks later. Anderson and the customer have agreed on the formula that will determine the price of goods based on the price of oil. Anderson makes this arrangement because oil is a key component of the goods that Anderson sells. 

2.   Latter Corporation received an order from Murray, Inc. for electronic components on Feb. 27th. Because Murray is struggling financially, Latter called the company and said it will get ready to fulfill the order, but it will not ship the order until payment is received by cashier’s check. Does Latter have a contract as of February 28th? 

Part II. Determine the number of performance obligations that exist in the following scenarios.

1. Tablet Tailors sells tablet PCs combined with Internet service which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hotspot. It offers two bundles with the following terms:

a. Tablet Bundle A sells a tablet with 3 years of Internet service. The price for the table and a 3 year Internet connection service contract is $500. The standalone selling price of the table is $250. Tablet Tailors sells the Internet access service independently for an upfront payment of $300. 

b. Tablet Bundle B includes the tablet and Internet plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3 year period. The product bundle sells for $600. Tablet Tailors provides the 3-year service plan as a separate product with a standalone price of $150. 

2. Garths Windows manufactures and sells custom storm windows for three season porches. Garths also provides installation service for the windows. The installation process does not involve changes in the windows so this service can be performed by other vendors. Garths enters into the following contract on July 1, 2018: The customer purchases windows for a price of $2,400 and chooses Garths to do the installation. 

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Money-back guarantee

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 more

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency