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Lina20 [59]
3 years ago
15

Gil is a Baxley Co. salesman desperate to make quota by the end of 2015. On the afternoon of December 31, 2015, he convinces a l

ongtime customer with excellent credit to sign a contract to accept delivery of Baxley Co.’s Widgetron Deluxe. Gil promises the customer a deep discount off the list price that they can ‘hash out later’ if the customer is 100% happy with the product. Gil does not tell the customer that the company’s policy in such cases is to offer the maximum discount of 30%. The customer states he will have to consult an astrologer and a groundhog to determine if he is happy with the product. Gil oversees the delivery that evening of the Widgetron Deluxe. Should the revenue from this sale be recognized in 2015? Why or why not?
Social Studies
1 answer:
kolezko [41]3 years ago
6 0

Answer:

The revenue should not be recognized because of the unusual and subjective terms under which the buyer has the right to return the product.

Explanation:

If a buyer of goods has the right to return a product, the transaction is considered a sale with a right of return. When regular sales are made under these terms and there is a reasonable basis for estimating returns, revenue from the sale ought to be recognized and an allowance for returnsshould be established.

However, when the  rate of returns cannot be reasonably estimated, revenue is not recognized until the right of return expires. Even though the goods were shipped in 2015, until the buyer accepts the goods or the right to return them expires, revenue would not be recognized.

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3 years ago
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Sphinxa [80]

Answer:

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Explanation:

Monroe Doctrine, (December 2, 1823), cornerstone of U.S. foreign policy enunciated by Pres. James Monroe in his annual message to Congress. Declaring that the Old World and New World had different systems and must remain distinct spheres, Monroe made four basic points: (1) the United States would not interfere in the internal affairs of or the wars between European powers; (2) the United States recognized and would not interfere with existing colonies and dependencies in the Western Hemisphere; (3) the Western Hemisphere was closed to future colonization; and (4) any attempt by a European power to oppress or control any nation in the Western Hemisphere would be viewed as a hostile act against the United States.

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