Business
Engineering
Math
Science
Social Science
Intermediate Accounting: Reporting...
Solutions
Intermediate Accounting: Reporting...
Luke’s Gameday Company sells a package of goods and services to its customers. The package includes four FCS Championship football tickets, a reserved parking space, a pregame party, and four pregame sideline passes. The package sells for $18,000. Because the stand-alone selling for the pregame party and sideline passes is not observable, Luke’s Gameday Company is interested in determining how to allocate the transaction price to each underlying performance obligation.
Required:
Discuss what methods are available for estimating a stand-alone selling price for a good or service when the stand-alone selling price is not directly observable. Which method is preferred?
Discuss the methods available for estimating a stand-alone selling price for a good or service if the stand-alone selling price is not directly observable.
The following methods are suggested by GAAP for estimating the stand-alone selling price (but other Methods could be used):
- “Adjusted market assessment approach”
- “Expected cost plus a margin approach”
- “Residual approach”
Adjusted Market Assessment Approach
“Adjusted market approach” considers the market wherein, the sale of goods and services takes place and it anticipates the price that the customer is willing to pay in the market. Factors like price of competitors, position of market, structure of cost must also be examined. If a single good or service is sold in multiple markets, then it could have more than one stand-alone selling price. While estimating stand-alone selling prices, Discounts provided by an entity when a good or service is sold separately must be taken into consideration.
Expected Cost plus a Margin Approach
In “Expected Cost plus a Margin Approach method”, “gross profit margin “is added to the expected cost of the goods or service by the seller. Costs included in the estimate must be constant with those entity that generally considerers in setting “stand-alone prices”. In this method, both direct and indirect costs should be considered...
Chapter 17 Solutions
Additional Business Solutions
Find more solutions based on key concepts
Show solutions addNancy Summers worked 44 hours during the past week. She is entitled to 1 times her regular pay for all hours wo...
College Accounting, Chapters 1-27
Statement of cash flows A summary of cash flows for Parker Consulting Group for the year ended January 31, 20Y4...
Corporate Financial Accounting
Product Mix Decision, Single Constraint Norton Company produces two products (Juno and Hera) that use the same ...
Managerial Accounting: The Cornerstone of Business Decision-Making
Sunny Nights Inc. is completely powered by the city power grid, but management is considering switching fuel so...
Financial And Managerial Accounting
What are economic resources?
Accounting Information Systems
On March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings Company, a furnit...
Financial Accounting
Recording standards in accounts "The Assembly Department produced 5,000 units of product during March. Each uni...
Financial & Managerial Accounting
Outline the historical evolution of business social responsibility.
Foundations of Business (MindTap Course List)
How reasonable is it for every country to follow policies aimed at increasing net exports?
Economics:
A manager of a large corporation recommends a 10,000 raise be given to keep a valued subordinate from moving to...
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Suppose that in the United States, producing an aircraft takes 10,000 hours of labor and producing a shirt take...
Brief Principles of Macroeconomics (MindTap Course List)
Saying Yes to a Stellar Job Offer: Your dream has come true: you have just been offered an excellent position. ...
Essentials of Business Communication (MindTap Course List)
Suppose GDP is 8 trillion, taxes are 1.5 trillion, private saving is 0.5 trillion, and public saving is 0.2 tri...
Principles of Economics (MindTap Course List)
The circular-flow diagram illustrates that, in markets for the factors of production. a. households are sellers...
Essentials of Economics (MindTap Course List)
Given a description of a companys marketing mix, classify the elements of the marketing mix and the category of...
Contemporary Marketing
Melissa buys an iPhone for 240 and gets consumer surplus of 160. a. What is her willingness to pay? b. If she h...
Principles of Macroeconomics (MindTap Course List)
(Household Production) What factors does a householder consider when deciding whether to produce a good or serv...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Describe the social factors that affect marketing
MKTG 12:STUDENT ED.-TEXT
Using Past Information to Estimate Required Returns Use online resources to work on this chapter's questions. P...
Fundamentals of Financial Management (MindTap Course List)
List and briefly explain the three principles that describe how the economy as a whole works.
Principles of Microeconomics (MindTap Course List)
Interview an employee at your university, such as a department head or secretary. Have the employee answer the ...
Management, Loose-Leaf Version
RISK ANALYSIS a. Given the following information, calculate the expected value for Firm C's EPS. Data for Firms...
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
When financial reporting fraud is committed, what is generally the target of the help?
Accounting Information Systems
Entries for notes receivable The series of seven transactions recorded in the following T accounts were related...
Financial & Managerial Accounting
The accountant for Healthy Life Company, a medical services consulting firm, mistakenly omitted adjusting entri...
Financial Accounting
Which of the following taxes are not withheld from an employee? a. FICA Social Security b. Federal Unemployment...
College Accounting (Book Only): A Career Approach
Flexible overhead budget Wiki Wiki Company has determined that the variable overhead rate is 4.50 per direct la...
Accounting (Text Only)
LO2 The adjustment for the amount of factory supplies used during the year includes a (a) debit to Factory Supp...
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Kelley Company has completed the following October sales and purchases journals: a. Total and post the journals...
College Accounting (Book Only): A Career Approach
Figure 1.8 provides a bar chart showing the amount of federal spending for the years 2004 to 2010 (Congressiona...
Statistics for Business & Economics, Revised (MindTap Course List)
What is efficiency? Is it the only goal of economic policymakers?
Principles of Macroeconomics (MindTap Course List)
As womens wages and employment opportunities have expanded over the past 50 years, Americans have purchased mor...
Exploring Economics
REPLACEMENT ANALYSIS The Bigbee Bottling Company is contemplating the replacement of one of its bottling machin...
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Consider the business eventprocessing activity, entering a customers order. Identify the key business event dat...
Pkg Acc Infor Systems MS VISIO CD
REACHING A FINANCIAL GOAL Erika and Kitty, who are twins, just received 30,000 each for their 25th birthday. Th...
Fundamentals of Financial Management (MindTap Course List)
The following unemployment tax rate schedule is in effect for the calendar year 2019 in State A, which uses the...
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Gross profit method Based on the following data, estimate the cost of the ending inventory: Sales 9,250,000 Est...
Corporate Financial Accounting
Issuing stock Sahara Unlimited Inc. began operations on January 2,20Y4. with the issuance of 250.000 shares of ...
Survey of Accounting (Accounting I)
Big Hit Video must determine how many copies of a new video to purchase. Assume that the companys goal is to pu...
Practical Management Science
Discuss the difference between traditional software models delivered by Application Service Providers (ASPs) an...
Purchasing and Supply Chain Management
Suppose the equilibrium wage for a college athlete is 40,000, but, because of NCAA rules, the university can of...
Economics (MindTap Course List)
Emery Manufacturing Company produces component parts for the farm equipment industry and has recently undergone...
Cornerstones of Cost Management (Cornerstones Series)
The long-run Phillips curve is a(an) _____ line at the natural rate of unemployment. a. horizontal b. vertical ...
Economics For Today
What is the advantage of the Herfindahl index over the four-and eight-firm concentration ratios? Explain your a...
Microeconomics
