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Metropolitan Case Study

In: Business and Management

Submitted By willyoucry
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METROPOLITAN CASE STUDY
Part I: Codifications and quotations used in following scenarios 1) Service revenue should be recognized on a straight-line basis, unless evidence suggests that the revenue is earned or obligations are fulfilled in a different pattern, over the contractual term of the arrangement or the expected period during which those specified services will be performed, whichever is longer. (SAB Topic 13A3, Interpretive Response to ques.6) 2) Revenue should be deferred until the specifications have been achieved or the customer accepts the service. (SAB Topic 13A3b, Interpretive Response to ques.1) 3) Being realized or realizable. Revenue and gains generally are not recognized until realized or realizable...states that revenue and gains are realized when products (goods or services), merchandise, or other assets are exchanged for cash or claims to cash... (ASC 605-10-25-1-a) 4) Being earned… states that revenue is not recognized until earned…an entity’s revenue-earning activities involve delivering or producing goods, rendering services, or other activities that constitute its ongoing major or central operations, and revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. (ASC 605-10-25-1-b) 5) All waste becomes the property of, and owned by, Metropolitan when they service the customer and take physical ownership of the waste. Metropolitan assumes all responsibility and liability associated with the many forms of waste when they collect it and bring it to one of their many waste-handling facilities. Once the waste is in the possession of Metropolitan they are deemed the owners of the waste. (Metropolitan Case) 6) ACCT 320 Book: a. Service revenue often is recognized at a point in time if there is one final activity...

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