In your own words, explain the company’s reasoning for recording $5.8 million as current revenue while recording the remaining $1.2 million as deferred revenue. Also, document where on the financial statements the deferred revenue account would be presented.
What will be an ideal response?
Longeta’s recording of $5.8 million in revenue for the year ended September 30, 2019 related to the
portion of the contract tied to the actual shipment of software product. Given the shipment of the
software product to Magicon prior to year end, Longeta decided to treat the revenue associated with
the sale of software as a current sale on the income statement.
In contrast, Longeta recorded the remaining $1.2 million as deferred revenue given that
Longeta was obligated to provide support services related to the software during future periods.
Because delivery of support services had not occurred as of year end, Longeta recorded the portion
of the contract related to support services as deferred revenues. For the portion of services to be provided over the next 12 months, Longeta would present the deferred revenue as a current liability on the balance sheet. To the extent there was a commitment to provide services after 12 months, Longeta would record deferred revenues as a long-term liability on the balance sheet.
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Indicate whether the statement is true or false
Which of the following best describes the bubble concept?
A)?No new plants are permitted in areas in which the result will be an increase in emissions even if the new plant is not the only source of emissions B)?A theory that governs the release of effluent into navigable waters C)?A theory that governs how the liability for toxic waste clean-up costs are allocated D)?A theory that was eliminated under the Clean Air Act Amendments of 1990
The look-back interest adjustment involves the
A) calculation of interest on an installment sale. B) calculation of gross profit on an installment sale collection. C) calculation of additional tax due if actual cost rather than estimated cost had been used on the percentage of completion method. D) calculation of interest on additional tax that would have been due if actual cost rather than estimated cost had been used on the percentage of completion method.
As a result of conducting a gap analysis, a potential entrepreneur proved there was a need for the business. This is known as
A. operational financing. B. performing a due diligence analysis. C. generating potential business ideas. D. formulating a basic market plan.