Hoang Thi Thanh Ha – 13200154 Case 13-1 Refer-a-Friend Program 1. How should the $25 Referral Credit be record in Runway’s Income Statement – as a reduction of revenue or as a marketing expense? By implementing the “Refer-a-Friend Program” Runway Discount is taking the proper steps to increase its sales and its customer base. With the application of this program, however, there are some additional procedures that must be followed when recording transactions involving the $25 Referral Credit. According to ASC 605-50-45-1 Revenue Recognition, a vendor may give a customer a sales incentive or other consideration.
By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold. Requirement 2 - A Generally, the lower of cost or market method is used to value inventory in order to “avoid reporting inventory at an amount greater than the benefits it can provide” (Spiceland, Sepe, & Nelson, 2013, p. 476). According to Spiceland, Sepe, and Nelson (2013) the “change in replacement cost usually is a good indicator of the direction of change in selling price” (p. 477). When the change in replacement cost is negative the LCM method allows companies to apply the conservatism principle. The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle).
If it was effective as it was said, or it is just a marketing approach to market the company in sustainability. * How much economic benefit will the plan bring the company? * How much reduction in greenhouse gas will the plan achieve? * I am favor the decision. And my reasons are listed as below: * Net zero facility would bring the company long-term economic benefits.
To encourage the employees to come up with innovative ideas, a quarterly price by way of a $25.00 gift card will be given to the employee with the best idea. Another concept that has worked for many other companies is sharing the financial risks of marketing with other companies. Displaying control over the supply chain aspect of the operations by having inventory management restrictions and continuous reviews of contracts will also have a positive impact on the bottom line. Lastly, establishing a culture of financial stewardship will reflect in a cross departmental approach to cost savings as opposed to holding just the purchasing
People Make Decisions University Of Phoenix May 2, 2012 Robert Stack • Briefly explain the principles of individual decision-making. The principles of individual decision-making are as follows: Rational people- Rational people weigh out their benefits and cost of each of their goals. Then they use choose the action that the benefits would outweigh the cost. People respond to economic incentives- Economists emphasize that consumers and firms consistently respond to economic incentives. Optimal decisions are made at the margin: Economists use the word marginal to mean “extra” or “additional.” Economists reason that the optimal decision is to continue any activity up to the point where the margin benefit equals the marginal cost.
The FASB ASC 845-10-30 provides guidance for certain nonmonetary exchanges in which one entity transfers nonfinancial assets to a second entity in exchange for a noncontrolling ownership interest in that second entity. Exchanges of nonmonetary assets for noncontrolling ownership interest in a second entity must be accounted for at fair value and full or partial gain recognition is required. The fair value of the asset given up ($6.5M) was greater than the carrying value ($6M). Therefore a partial gain should be recognized since the entity accounts for the ownership interest using the equity method. Acer Corp should recognize a gain of $375,000 [($6.5-$6)* 75%).
Firstly they can simply outsource the competition to FightWare and pay them the sum of $25,000. The second alternative is to arrange for an in-house designing for the competition while partnering with the local gaming clubs and hiring marketing executives. The third alternative is to pursue the traditional path of advertising and campaigning thereby provoking the users to buy the software which will enhance their gaming experiences. Chosen Alternative: While analyzing the three alternative
On the other hand, if the customer’s payment is invalid, Flyaway.com assumes credit risk. Issue: Should Flyaway.com report its ticket revenue on a gross basis (as a principal) or net (as an agent)? Flyaway.com (“Flyaway” or the “Company”) must determine whether its ticket sales revenue should be reported gross (for the amount billed to the customer) or net (for the amount retained after remitting customer payments to the airlines). ASC 605–45 (Revenue Recognition—Principal Agent Considerations) addresses transactions and activities including: 15-2(b). Services offered by an entity that will be provided by a third-party service provider.
Product and service (what is the nature of the product/service in the case study – industry?) Price (how does the case study set prices- what does price mean in the industry?) Promotion (how does the case study promote its business- what is common in the industry?) Conclusion (a brief summary of your report) Purpose: to summarise the content of your work Length: 250 words approximately Conclusions should not contain waffle or platitudes about the world; they should be specifically related to the overall fulfilment of your purpose and intentions (from the introduction). That is, you stated what your intentions were; now explain how those intentions were met.
Research limitations/implications – This research demonstrates that there is a signiﬁcant difference in the personal and social fairness of price, whether it is a price for goods, wages or rents. Practical implications – Sellers, employers and realtors can beneﬁt from the knowledge that providing a socially acceptable reason for the increase of a product or rental price or the decrease of a wage can increase the likelihood that the recipients will judge the price increase as being fair. Originality/value – Prior research into price fairness has confused the two aspects of a fair price. By isolating the two separate components, we clarify how individuals perceive price fairness in the personal sense and how that perception is altered by a concern for fairness in the social sense. Keywords Pricing, Consumers, Rents, Pay Paper type Research paper Introduction Price fairness is of growing interest to marketing researchers (e.g.