ecognition criteria for revenues and gains are met and provide support for your answer. (a) An order of $25,000 for merchandise is received from a customer. (b) The value of timberlands increases by $40,000 for the year due to normal growth. (c) Accounting services are rendered to a client on account. (d) A 1991 investment was made in land at a cost of $80,000. The land currently has a fair market value of $107,000. (e) Cash of $5,600 is collected from the sale of a gift certificate that is redeemable in the next accounting period. (f) Cash of $7,500 is collected from subscribers for subscription fees to a monthly magazine. The subscription period is 2 years. (g) You owe a creditor $1,500, payable in 30 days. The creditor has cash flow dif- faculties and has agreed to allow you to retire the debt in full with an immediate payment of $1,200.
For each of the following transactions, events, or circumstances, indicate whether the
recognition criteria for revenues and gains are met and provide support for your answer.
(a) An order of $25,000 for merchandise is received from a customer.
(b) The value of timberlands increases by $40,000 for the year due to normal growth.
(c) Accounting services are rendered to a client on account.
(d) A 1991 investment was made in land at a cost of $80,000. The land currently
has a fair market value of $107,000.
(e) Cash of $5,600 is collected from the sale of a gift certificate that is redeemable
in the next accounting period.
(f) Cash of $7,500 is collected from subscribers for subscription fees to a monthly
magazine. The subscription period is 2 years.
(g) You owe a creditor $1,500, payable in 30 days. The creditor has cash flow dif-
faculties and has agreed to allow you to retire the debt in full with an immediate
payment of $1,200.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
