The information “Bookings” convey is that: the company record sale of virtual goods as deferred revenue and then recognize the revenue over the estimated average life the purchased virtual goods or as the virtual goods are consumed. The way that Zynaga recognized revenue is based on the estimated life of virtual goods. This is not the same information available in the GAAP-based financial statements. Under GAAP, companies use accrual basis which they recognize revenue when they perform the service. 2) Do you think this is a useful measure?
d. How should Lani report the lease transaction on its December 31, 2006, balance sheet? The reports should fall under Lani’s December 31, 2006 balance sheet which displays non current and should be noted separately. The capital ease should be listed under the capital lease on December 31, 2006. Case 13-5 Lease Classifications a. What criteria must be met by the lease in order that Doherty Company classify it as a capital lease?
In addition, each division is judged independently on the basis of its profit and return on investment. Finally, most of Thompson’s sales are made to external entities. 5. Create a diagram that illustrates the relationships among the Birch divisions and external companies. Add the cost flows to your diagram to help you answer the next
All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation. A well-estimated WACC can benefit a company in various ways, such as estimating a company’s cost of capital, capital budget decision, designing the corporate financial structure, method of financing, evaluation of top managers’ performance, etc. Errors in WACC Calculation and Corrections During our discussion on Cohen’s analysis, we found that problems arose in her calculations regarding the use of historical data on calculation of cost of debt, value of beta used to compute cost of capital, and value of equity. We examined each error and made the following corrections. (a) Cohen mistakenly used the historical data in estimating the cost of debt.
According to paragraph 605-50-25 certain sales incentives entitle a customer to receive a reduction in the price of a product or service of a specified amount of a prior purchase price charged to the customer at the point of sale. A vendor shall recognize a liability for those sales incentives at the later of the date at which the associated revenue is recognized by the vendor or the date at which the sales incentive is offered based on the estimated amount of refunds or rebates that will be claimed by customers.
When there is an established item, L.L Beans uses the trends based on past demand to forecast future sales ; these trends being mostly seasonal and therefore generates enough information to know how much stock is needed when. On the other hand, for new items, which do not have sufficient past demand data, L.L.Beans uses the A/F ratio which is based on past behavior of individuals with the actual demand. Once this is done, LL.Beans must calculate the profitability of the item and the overstock and under stock costs which calculates the optimal amount of the item. Question 2: What item costs and revenues are relevant to the decision of how many units of that item to stock? The manufacturing cost for LL Beans and the price at which the item is sold are relevant to the decision of how many units of that item to stock because with this the profit margin of each item is calculated giving an optimal balance of how much to of the item to stock.
Self-checkout is connected with retailers store information system. From the retailers central office it is seen as yet another point of sale with all sales information consolidated and managed in a usual way. Modern self-checkout is powerful system that can handle the same functionality as traditional tills and even more, including proceeding loyalty cards and programs, calculating discounts, selling GSM prepaid cards, giving cash back, handling items with security items or no barcodes. Literature Review: The global retail environment has observed a new trend towards the rapid use of self-service technologies (Jamal, 2004, Burke, 2002) where transactions among customers and employees are accompanied and supported electronically (Merrilees and Miller, 2001, Meuter et al., 2000). According to Michel Haagmans (Director of Re-Vision) “many leading European retailers are heavily investing in self-Checkout technology as part of their growth strategy” (Anon, 2010, p.1) with leading grocery retailer, Tesco & Sainsbury, increasingly using the technology (Anon, 2010, Hobson, 2010).
QUEST SOLUTION The biggest challenge to Barilla Spa was to implement a constant inventory control leading to overstock and stockouts. SOLUTION 1 Promoting JITD for everyone of it retail customers a quality and implementing market for JITD. PROS Having a higher profit by saving on warehouse space. Time to delivery helps with fresh stock and variation. The last part that helps is lower transportation cost by having one time delivery instead of multiple deliveries.
1) How does Zara add value to the distribution side of its supply chain? Explain how each action or strategy adds value. Zara has added value to its distribution network by first concentrating on its distribution centers. All goods are shipped through its main distribution center, and extra space is built into the distribution center to handle economic or seasonal surges. Zara has tailored its working hours at the distribution center to match demand, and thus pays for only the labor needed to achieve accurate and timely shipping.
So the whole equation should be concluded as Client Benefits – Client Cost(excludes price) = Value offered- Value Gap = Value Perceived – Customer Incentive to Purchase = Price. The process of developing buyer-seller relationship is a process to increase CIP. Interpersonal Relationship As McCall (1966) points out: Marriage is a restrictive trade agreement. The marriage is a restrictive trade agreement. The two individuals agree to exchange only with one another, at least until such time as the balance of trade becomes unfavorable in terms of broader market considerations.