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Firlakuza [10]
3 years ago
12

Fact pattern: on november 1, year 1, iba co. entered into a contract with a customer to sell 150 machines for $75 each. the cust

omer obtains control of the machines at contract inception. iba’s cost of each machine is $45. iba allows the customer to return any unused machine within 1 year from the sale date and receive a full refund. iba uses the expected value method to estimate the variable consideration. based on iba’s experience and other relevant factors, it reasonably estimates that a total of 20 machines (12 machines in year 1 and 8 machines in year 2) will be returned. iba estimates that (1) the machines are expected to be returned in salable condition and (2) the costs of recovering the machines will be immaterial. during year 1, 10 machines were returned. at the end of year 1, iba continues to estimate that a total of 20 machines will be returned within 1 year from the sale date. what amount of refund liability, if any, will be reported in iba’s december 31, year 1, balance sheet?
Business
1 answer:
tino4ka555 [31]3 years ago
4 0

Answer:

$750

Explanation:

Since Iba's estimate of returned products is 20 units for both year 1 and 2, and only 10 units have been returned by the end of year 1, they must record a refund liability = 10 units x selling price = 10 units x $75 per unit = $750

Refund liability should represent the total amount that Iba considers that its clients are entitled to receive.

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ololo11 [35]

Answer:

No impairment loss would be reported

Explanation:

The computation is shown below;

Impairment loss = carrying value - recoverable amount

Where,

The recoverable amount would be the higher amount of fair market value and value in use

So the recoverable amount would be $2,545,000

Now the impairment loss is

= $2,500,000 - $2,545,000

= -$45,000

Since the impairment loss comes in negative so no impairment would be recorded

7 0
3 years ago
A firm has three different production​ facilities, all of which produce the same product. While reviewing the​ firm's cost​ data
kakasveta [241]

Answer:

Joshua statement is correct.

Explanation:

Marginal cost:

Is the cost of producing a new unit.

Average Cost:

\frac{Fixed Cost + Variable Cost}{UnitsProduced} = $Average Cost

\frac{Fixed Cost}{UnitsProduced} + $Variable Cost Per Unit= Average Cost

If the marginal cost of this plant is lower than their other plants, it can decrease his average cost by increasing the amount produced.

This increase in production decrease the impact of the fixed cost in the unit price. At more production the average cost will decrease. Because the variable cost keeps at the same value but the fixed cost per unit decrease.

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3 years ago
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Assoli18 [71]

Answer:

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Explanation:

NBB carries a strength of knowing their brand. With an expansion making use of branding and communication strategies, they would have succeed in their goal of being a unique culture remaining committed to their initial mission of being a fun, socially, and environmentally responsible company. For the company to maintain its whimsical and personal touch with consumers, NBB should spring forth new ideas to communicate with consumers, this will keep the customers updated and make them interested in staying loyal to the company.

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4 years ago
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So that it is the right answer.

5 0
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"when buying or selling a futures contract, the trader commits what amount of funds"
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