How should the $25 Referral Credit be recorded in Runway's income statement?In accordance to ASC 605-50-45 Revenue Recognition, a cash consideration handed to a consumer by a vendor or retailer is deemed a decrease in the selling prices of the products or services retailed. This would imply that these cash considerations would be deemed as an expense and a decline in the revenue to be generated by the vendor. Nonetheless, the cash consideration can be deemed as an expense if it solely meets two requirements. First, the cash consideration has to give rise to an identifiable benefit that is separable from the purchase of the recipient, in the sense that the vendor could have achieved the benefit through a third party, and not the purchaser. Secondly, the value that is provided has to be reasonably approximated by the vendor (IAS Plus, 2016).
In this case, Runway does meet these two particular requirements because the $25 credit surpasses the estimated fair value of the benefit received. In addition, Runway receives an identifiable benefit in interchange for the $25 consideration. Bearing this in mind, Runway should record the $25 referral credit as a marketing expense or revenue reduction in the income statement of the company (IAS Plus, 2016).
When...
1. How should the $25 Referral Credit be recorded in Runway's income statement? In accordance to ASC 605-50-45 Revenue Recognition, a cash consideration handed to a consumer by a vendor or retailer is deemed a decrease in the selling prices of the products or services retailed. This would imply that these cash considerations would be deemed as an expense and a decline in the revenue to be generated by the vendor.
Rather than being idle and receiving public benefit, individuals of working age typically prefer completing useful work. Mark P. Altieri, an associate professor of accounting at Kent State University, Kent, Ohio, and Jason A. Rothman, (2006), an associate at Wickens, Herzer, Panza, Cook and Batista, note a number of enhancements to WOTC in the article, "Surviving Katrina: Tax breaks for victims of the costliest catastrophe in American history." According to
Marketing Coined by marketing guru Jay Conrad Levinson, guerrilla marketing is marketing that is unconventional, nontraditional, not by-the-book, and extremely flexible. The nine major differing factors from conventional marketing provided in "360 Degree Internet Marketing - Think Outside the Box for Minimum Cost, Maximum Results," (2001), are: Instead of investing money, you invest time, energy and imagination. Instead of guesswork, you utilize our expertise and experience. Instead of measuring your success in terms of
Ponzi SchemeBernie Madoff�s Ponzi scheme is one of the biggest scandals that have faced the U.S. Securities and Exchange Commission. The beginning of this scheme can be traced back to 1960 when Madoff started his brokerage company, which grew to become one of the largest brokerage companies on Wall Street. After establishing his company, Madoff started investing money as a favor to his family and friends. This marked the beginning
Shareholder Capitalism as a Model for Economic Development The idea that shareholder capitalism may serve as a powerful type of economic progression model has been made practical with the growth of credit along with a large marginal tax that delivers a security net for Americans, but additionally has its own limits. Shareholder capitalism, and also the American structure of corporate governance which can serve as its main-operating-system, continues to be held out
16. Help Rebecca and Jay apply four steps of the smart buying process to decide whether to replace Vehicle #2. What sources of consumer information might be useful to them? According to Auto Channel the four steps are: Determine your practical needs for a new vehicle, determine your budget and stick to it, determine your emotional needs, which car or truck really makes you happy when you drive it, and
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now