MEMORANDUM
To: Dr. John J. Morris, Department of Accounting
From: Group #9 (Sydney Case, Hannah Peterson, Kassidy Frederick)
Date: April 3, 2012
Subject: Acctg 642: Case 08-5 Sell-it Products Inc.
Statement of Facts
Sell-it Products Inc. manufactures, markets, and distributes consumer products. It has been brought to their attention that the SEC is questioning their reportable segments it disclosed in their Annual Report. Below are the relevant facts: • Sell-it Products sells their products through grocery stores, drug stores, and mass merchandisers. • The continents these products are sold in include the North America, Asia, and Europe. • SPI is organized in three divisions with the following products:
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The nature of the products and services ii. The nature of the production processes iii. The type or class of customer for their products and services iv. The methods used to distribute their products or provide their services v. If applicable, the nature of the regulatory environment, for example, banking, insurance, or public utilities. c) Beauty care products should not be aggregated, because it does not meet criteria iii under ASC 280-10-50-11. Shampoo is a hygiene product while cosmetics are used to enhance appearance. Cosmetics are marketed more toward women. Family care products should not be aggregated, because it does not meet criteria iii under ASC 280-10-50-11. Diapers have a specific target market (babies and elderly), while paper towels are an everyday household item. Drinks and Snacks products could be aggregated because they meet all the criteria under ASC 280-10-50-11. d) ASC 280-10-50-12 explains the quantitative thresholds to be applied to each operating segment. Only one of the criteria from this section applies. i. Its reported revenue is at least 10 percent of the combined revenue of all operating segments. e) According to ASC 280-10-50-12 the only three segments that met the criteria were cosmetics, paper towels, and drinks and snacks products (aggregated together). They have
b. Describe what it means for a business to "recognize" revenues. What specific accounts and financial statements are
COMPONENT PERCENTAGES INCOME STATEMENT (each item is expressed as a percentage of net sales revenue)
Some challenge that the most efficient regulator is free-market competition among those seeking to attract the buying public. They argue that government regulation is intrusive with the marketplace and works to the disadvantage of both consumers and producers. Advocates of government regulation, however, see a better need to observe and guide the path of competition. They believe that an entirely unrestrained market will unavoidably lead to monopolistic practices, higher costs, underserved segments of society, and lower-quality goods and
Review of ABC Company and the directions it is targeting. The strategy of the company is to lift the expected sales in an aggressive fashion, with the expected end target being to triple the current levels. The plan is to push sales into the targeted range of $3 million within 3 years versus the current amount which sits at $1.2 million. We will identify the perceived risk factors that may impact this aggressive strategy and its successful execution. The following will be those risk factors:
Explain the corresponding impact on total revenue for each of the three price ranges identified in part G.
18. Roder Corporation has seven industry segments with total revenues as follows. Based only on the total revenues test, which industry segments are reportable? Enter 1 if the segment is reportable. Enter 0 if the segment is not reportable.
This necessitated the need for development of regulatory measures for the industry. Bank regulation is a legal structure by which all financial
Their annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated); or
Being earned. Paragraph 83(b) of FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements of Business Enterprises, states that revenue is
1. The elimination of potential regulatory gap or overlaps arising from member regulation and market regulation
Which of the following measures the difference between the private costs of regulations and the private benefits for the producers of financial services? a. Capital adequacy b. Agency costs c. Net regulatory burden d. Charter value e. Liquidity risk FIs are special because a. their failure can impose negative externalities on the economy. b. they receive special
First of all, every economic sector that was subject to economic regulation before 1975, has undergone significant changes in the nature and extent of regulation. These changes had profound effects on the structure of industries, price levels, costs and productivity. The industries in which changes occurred in economic regulations are the carriers, heavy transport, public transport, railways, telecommunications, production and transportation of natural gas, cable television, banking and financial services , electricity and property insurance and liability. These industries vary in structure, behavior, nature of regulation, and distribution of responsibilities between federal and state regulatory authorities. There are also wide variations in the major reasons, causes, and consequences of regulatory changes in these industries.
(69% of revenues in Q4, 2000) when we calculate the restatements. In the balance sheet, we treat
The revenue comes not only in one or two specific products, but from all products
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