S&H Green Stamps
In the 1950 's and 1960 's supermarkets gave customers "green stamps" for every dollar of purchases at the grocery store. These stamps could then be redeemed by the customers for merchandise at an S&H warehouse.
Basically, the company (Sperry and Hutchinson) provided the stamps to the grocers who didn 't have to pay for the stamps until the month after they were given out to customers. Unused stamps could be returned to the supplier. The customer would collect the stamps in a book until enough stamps had accumulated. The customer would then visit S&H’s warehouse and redeem merchandise (e.g.. a TV, a basketball, a set of kitchen towels) for a specified number of filled stamp books.
When should S&H recognize the revenue
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Assuming that 10% of the stamps will not be redeemed, the ledger will be looks like:
Date Accounts Debits Credits
XXXX-XX Cash YYY Unearned Revenue 90%*YYY Sale 10%*YYY To record the sale of the stamps with the assumption of 10% of them will not redeemed YYYY-YY
(for each redemption) Unearned Revenue zzzzz Cash zzzzz To adjust unearned revenue to reflect earned from the redeemed stamps. Each time of redemption the amount will be register in the ledger. End of year Unearned Revenue Cash ttttt To adjust unearned revenue for the end f the year for all the stamps that was not redeemed. ttttt
Expense:
1. Matching principle - the expense, merchandise and other costs, should be matched with the revenue.
2. According to the revenues recognition in section 3:
a. If all revenue is recognized when stamps are sold, an accrual of the cost of the future premium redemptions would be necessary. In such a case, when stamp redemptions and related premium issuances occurred, the costs of the premiums would be charged to the accrued liability account.
b. If stamp sales were treated as an advance, the deferred revenue would be recognized and the matching cost of the premiums issued would be recognized with the revenue at the time of redemption.
c. Under the third alternative, some
The conditions for this alternative are very similar to alternative #2 in the aspect that the only thing that has changed is the condition for the collectability. If we decide to recognize the partial revenue of $15,000 on October 4, 2015, when the customer pays the remaining $15,000, collectability is assured 100 percent because all the payment has been paid. In
This control is directly related to the accuracy transaction-related audit objective for sales. The auditor might test the effectiveness of this control by examining a sample of duplicate sales invoices for the clerk’s initials indicating that the unit selling price was verified.
5. No because the amount of the invoice fluctuates for the same product in this type of scheme and therefore it would be difficult to figure out how much the invoice should have been made out for.
In order to raise revenue, the British Parliament passed legislation of the Stamp Act in 1765. The Stamp Act enforced purchasing tax stamps to buy paper. As a result of this legislation, the colonists were outraged. This new policy was very unwelcomed because it neglected the “Salutary Neglect” Act in which colonial taxes weren’t collected by the English. The book, America: A Narrative History, states that the
Due to the rising popularity of email and the easiness of scanning documents, less and less mail is being sent every year and because of competitors like FedEx and UPS the United States Postal Service (USPS) is having financial problems. All over the world there has been sweeping postal reform. New Zealand moved to three day mail delivery, Canada eliminated home delivery in cities, and the United Kingdom recently privatized their mail system. The United States Postal office has been losing money and reported a loss of $15.9 billion dollars in 2012. The USPS has been increasing stamp prices to make up for this financial loss, most recently increasing stamp prices from forty-four cents to forty-five. With congressing blocking the latest USPS
In Daniel Stone’s editorial article, “Flying Like an Eagle”, he advises the USPS some guidance to boost up their profit and their usage to the community. One of his inputs on the
"The United States Postal Service and the National Rural Letter Carriers’ Association are time honored institutions that provide a “post office on wheels” to the American public on a day‐to‐day basis. With the first rural delivery established in 1896, a century of evolution has changed the rural carrier position to what it is today. (NRLCA)
Another point the USPS should take into consideration when restructuring, is that it is too easy for most Americans nowadays to forget the significance of a hand written letter or card, when we can communicate within seconds through technology. Come to think of it, I remember running to the mailbox in excitement every November to collect a special, pink birthday card from my grandma with her messy cursive scrawled across the envelope. Now, my “special” birthday wishes are in a 30 second voicemail she leaves from her cell phone every year. The USPS must remind us of the significant difference it can make in communication by recapturing its emotional importance through advertising.
“...if the amount of future rebates or refunds cannot be reasonably and reliably estimated, a liability (or deferred revenue) shall be recognized for the maximum potential
Significance: This forces the states to comply to the government’s regulation if they want money.
The Postal Service has existed for more than two centuries. Millions of letters, birthday cards, Christmas cards, wedding
* To determine who will pay tax, the individual (self employed or sub contracting) or the organisation (contracted, PAYE).
The Company records deferred revenue when it receives payments in advance of the delivery of products or the performance of services. This includes amounts that have been deferred related to embedded unspecified and specified software upgrades rights. The Company sells gift cards and records deferred revenue upon the sale of the card, which is relieved upon redemption of the card by the customer. Revenue from AppleCare service and support contracts is deferred and recognized ratably over the service coverage periods.
Facilitates the flow of documents/information to and from the unit, and ensures financial integrity and consistency by controlling receipt of goods and services, requisitions, reconciliation of accounts and travel accounts.
Services of the USPS are to provide reliable, prompt efficient postal services in all communities and areas to patrons throughout the United States. Products are stamp purchases to send mail in person and online; purchasing postage, printing postage paid shipping labels through the technology of Click-N-Ship, add to Philatelic stamp collections, merchandise gifts, mailing products such as flat envelopes, and boxes. Shipping supplies, ecofriendly packaging, bulk media mail, money orders, passport application.