Fact Runway discount is a private online retailed selling discounted high-end fashion. The company has a program aimed at helping increase sales and customer base. Runway provides existing customers with a $25 credit if the customer refers a friend to the Runway website and purchase from Runway. After purchase by new client, the existing client gets $25 applied to future purchase from Runway. Issue Will Runway’s idea increase sales? Is it important to determine how to address the referral credit in the income statement? Should we record the $25 Referral Credit on Runway’s Income Statement as a reduction of revenue? Does the Financial Accounting Standards Board’s ASC consider it as a reduction of revenue? Runway discount should record the $25 Referral Credit after the existing client redeems the credit? Conclusion Yes Analysis The idea by Runway Discount to implement Refer-a-friend Program is an indication that it is taking proper steps to increase its customer, which will in turn increase sales. The refer-a-fried program aims at providing incentives to the current customers who refer their friends. With this program, there are some additional procedures that the company should follow when it is recording the transactions involving the $25 referral credit. It is essential to address how to document the referral credit in the income statement. When considering the case at Runway Discount, there are several issues to consider in this aspect. Whether the consideration is
The usage of discount coupons is simple and holds a lot of profit with website based coupons you get online from a store where securing is a factor you are incumbent to establish.
The company that I chose to do my presentation on is Maurices Store. I worked in retail as a manager for 12 years at the former County Seat and one of my assistants is still working retail as a manager at Maurices here in Dubuque. I was interested in choosing retail sales because it is where I started and I wanted to see how it has changed over the years.
Revenue is the gross inflow of economic benefits during the period arising in the ordinary course of activities. Revenue should be recognized when the future economic benefits that will flow to the entity can be measured reliably. The new standard will significantly change how companies recognize revenue. It creates a whole new codification in a new era of revenue recognition by replacing hundreds of pages of guidance that are specific for each industry to a single comprehensive standard applicable to virtually all industries. The recognition criteria are usually applied separately to each transaction, but sometimes and under specific circumstances, it is necessary to apply the recognition criteria to the separate recognizable parts or of a single transaction in order to reflect the substance of the transaction. In aviation industry, the revenue transaction or events takes a significant period of time in order to complete because of the nature of product delivering against the sum of money. The five‐step revenue recognition process for this transaction are as follows:
The first would be that instead of capitalizing the $210,000 to set up displays to promote the line, these displays could have been recorded as an Advertising Expense. One of the IFRS criteria for something to be considered an asset is that the benefit must be reasonably measurable. When it comes to anything done for the purpose of advertisement or promotion, it is hard to measure the benefit and that is why this cost could have been expensed rather than capitalized. However, by recording this event as an expense this would mean that Athina’s net income would have been overstated by $210,000 and that is an undesirable outcome for the national chain.
better to take a full advantage of reporting the income and report the business expenses as
IRC Sec. 213(a) states that “there shall be allowed as a deduction the expenses paid
How should the $25 Referral Credit be recorded in Runway’s Income Statement — as a reduction of revenue or as a marketing expense?
Revenue is the gross inflow of economic benefits during the period arising in the ordinary course of activities. Revenue should be recognized when the future economic benefits that will flow to the entity can be measured reliably. The recognition criteria are usually applied separately to each transaction, but sometimes and under specific circumstances, it is necessary to apply the recognition criteria to the separate recognizable parts or of a single transaction in order to reflect the substance of the transaction. In aviation industry, the revenue transaction or events takes a significant period of time in order to complete because of the nature of product delivering against the sum of money. The five‐step revenue recognition process for this transaction are as follows:
Prior to October 1, 1996, AOL accounted for the cost of direct response advertising as "Deferred Subscriber Acquisition Costs," i.e., it recognized (reported) the costs of mailing out diskettes allowing you to sign-on to AOL for 100 free minutes as an asset on its Balance Sheet. In accounting, we say that the costs were "capitalized," meaning reported on the Balance Sheet as an asset. This is in contrast to the costs being "expensed," flowing to the Income Statement immediately as an expense.
There is efficient use of coupons that is expected and made with websites you want to purchase from and validity of these coupons is only effective in use. You can professionally make your buys with discounted purchases efficiently gained as procurements from Nordstrom website is easily attained with your intention to make a discounted purchase from a web store.
Nothing unethical here, however, Affections is having difficulty collecting their accounts receivable due to a sluggish economy. Although offering this generous discount deal will most likely boost sales, the chance of accumulating higher uncollectable accounts greatens.
Piedmont Airlines recently invested over $1 million in state of the art equipment and employee development in order to forecast and analyze the appropriate amount of discounted fares to offer per flight. The company discovered that by offering several discounted flights to consumers willing to book their travel well in advance of their departure date left many options available for the business traveler who needed to book much closer to the actual departure date. The analysis was the task of the Revenue Enhancement Department (RED) managed by Marilyn Hoppe. While this state of the art equipment was a step in the right direction, Marilyn believed that there were still a lot of subjective decisions being made and
In this negotiation, my walk away point is a contract package worth less than $118 000 to myself. To determine this, I consulted my BATNA – looking for other job openings – which the average contract package ranges between $100 000 to $140 000. Taking the mean of this range gives $120 000: the minimum total two-year salary of a MEDWARE program manager. I am willing to accept this minimum as my starting wage due to my inexperience as a fresh graduate.
Ms. Ringer is largely supporting operations through her line of credit versus managing costs. In review of the operating costs, overhead and administration have increased by 8% from 2008-2011 or $116,870. In addition salary dollars continue to increase from 2008-2011 by $111,150 with no efforts to flex. The other expenses are staying steady in proportion to gross revenues. There may be opportunities in these areas however salaries and overhead is the greatest opportunity to scale back costs and contribute to increased net income and ultimately positive cash flows. Flexing salaries and benefit to 44% of gross revenue and reducing overhead and expenses to 10% of gross revenue is recommended for Ms. Ringer to increase net income to $152,956 and equity to $240,214 (exhibit Operating Statements-2012 proforma).
ABSTRACT The obligation to provide free or reduced-fare travel to passengers who redeem their accrued frequent flyer program (FFP) benefits represents a significant liability on every major U.S. airline’s balance sheet. Major U.S. airlines employ one of two methods to account for the liabilities they incur when issuing mileage credits to traveling passengers. The Deferred Revenue Method recognizes a liability for the fair