ipl-logo

Pure Train Case Study

653 Words3 Pages

If Pure-Train sells extended warranties to its customers for a fee, it indicates that a contract is separately priced. This implies that the extended warranties provide a warranty protection or product services that are not included in the acquisition price of the product covered by the contract (FASB ASC 605-20-25-1). FASB also states that extended warranty provides “coverage against the risk of certain specified claim costs for a specified period” (FASB ASC 605-20-25-2). For example, if the customer requests a covered service to be performed on the product that needs repair or service costs, such claim costs are considered repair costs (FASB ASC 605-20-25-2). Under the new rules, revenue from extended warranty contracts should be recognized in income over the period of the contract (FASB ASC 605-20-25-3). …show more content…

However, in circumstances where it is sufficiently evident that the costs of providing services under the contract are incurred on other than a straight-line basis, revenue must be “recognized over the contract period in proportion to the costs that are expected to be incurred in performing services under the contract” (FASB ASC 605-20-25-3). Since the extended warranties demand that Pure-Train provide customer service and repair in 36-months, the revenue must be recognized in income over this contract period. As mentioned above, the revenue from these contracts needs to be deferred and recognized in income on a straight-line basis over the contract period. This could result in being recognized as revenue evenly over the contract

Show More
Related

FASB Accounting Standards Codification Case Summary

254 Words | 2 Pages

ABC offers separately priced extended warranties for appliances sold that are non-refundable and have no limits to the potential cost of honoring the warranty. Although ABC does track warranty profits and losses by appliance type, assume that no analysis has been performed to determine the rates at which cost are incurred throughout the warranty period. Assuming that manufacturer warranties provide coverage for the appliance for 1 year from the date of purchase, when should revenues and expenses of such warranties be recognized? FASB Accounting Standards Codification (ASC) topic 605-20-25-3 (Revenue Recognition) states that in regard to extended warranties “revenue shall be recognized in income over the period in which the seller is obligated

Read More

Broadspire Case Study

576 Words | 3 Pages

6.8. Client and Broadspire agree to the following terms for Arkansas insured workers’ compensation claims; (i) Broadspire is acting on behalf of the insurer for the payment of claims both within and in excess of the deductible; (ii) Broadspire shall periodically provide accurate and timely data to the Client’s Arkansas workers’ compensation insurance carrier (“Carrier”) on all claims paid from “first dollar”; (iii) the Carrier shall immediately replenish the Loss Fund Account if it is not replenished timely by the Client and shall bill the Client for such amount; and if the Loss Fund Account is funded by the Client, Broadspire must notify injured workers that the claim is being adjusted and will be paid on behalf of the Carrier; (iv) the

Read More

Navistar's Lawsuit Against Deloitte

607 Words | 3 Pages

Warranties are contingent liabilities; therefore, Navistar should have estimated the expenses and use accrual-basis accounting approach to record the warranty expense. The auditors should have looked at their warranty expense and unearned warranty revenue accounts to conclude if the numbers on the financial statements matched the numbers on the

Read More

Northern Pacific Railway Research Paper

395 Words | 2 Pages

In 1864 Congress approved the Northern Pacific Railway to be built. The NPR is the first transcontinental railroad in the northern part of the country. It is 8,316 miles long, beginning in Minnesota and ending in Washington state, with many branches going off the main line. When congress approved it they also supplied nearly 40million acres of land grants to build the railroad on. Construction didn 't go underway until 1870, and the rail road was finally christened to open on Sept. 8 1888.

Read More

Transcontinental Railroad Dbq Essay

415 Words | 2 Pages

People always say that the best inventions ever are phones or computers, but there is one that people take for granted. This invention changed the way we look at shipping forever. The Transcontinental railroad changed the United States economically more than socially or politically because, it allowed western states export their goods easier, increased the amount of goods exported, and made it cheaper for states to export their products. The U.S was changed more economically, because it helped transport the western states goods to the east so it could be transported. Lovelock Nevada was a city that mined silver.

Read More

Steam Engine Trains In The Early 1800's

160 Words | 1 Pages

There have been steam engine trains trailing the United States in the early 1800’s. Many of the early ones ran only a few dozen miles. When the railways ran longer distances, the cost to build and later ride them were be extremely high. However, long distances were what Minnesota needed to keep up with the competitive and growing nation around it. “Construction began on the first track in 1861 in St. Paul and was completed in 1862.”

Read More

Transcontinental Railroad Research Paper Outline

1080 Words | 5 Pages

Transcontinental Railroad Tera Richardson, 4336787 History 102 B008 Sum 17 Professor Traci Sumner American Military University July 22, 2017 Abstract The transcontinental railroad was one of the biggest advocates for the industrial economy and westward expansion. The railroads could transfer goods and people across the country with ease, and quickly. While some bad came from this miraculous progression, such as the panic of 1873 and a yellow fever epidemic, the good outweighed the bad as it enabled the United States to fulfill its Manifest Destiny through westward expansion.

Read More

Transcontinential Railroad Thesis

148 Words | 1 Pages

Transcontinential Railroad had a huge impact on the Native Ameriacans, Society and the Environment. Here is one example of how the Native Americans were impacted: Some of the hardships they faced were very little food, only ate once during their working hours. They worked long hours for very little money, and they had ages 10 and up working. Transcontinential Railroad helped the society grow with the transportation it provided. It replaced wagon trains of previous decades which became usless.

Read More

Transcontinental Railroad Thesis

383 Words | 2 Pages

The Transcontinental Railroad The completion of the first Transcontinental Railroad was an important event in the United States history. There were many challenges in building it, but after it was finished, it connected the East Coast of the United States to the West Coast. The railroad took three whole years to build, with the help of two railroad companies and thousands of other hired workers.

Read More

Hong Kong Dragon Airlines Case Study

2150 Words | 9 Pages

The most significant component of cash outflows in case of purchase option was the cost of the replacement spare engine. Our cash flows included the tax shield on depreciation, and maintenances costs associated with the purchase and use of the engine. We determined the after tax cash flows under both options, in case of Hong Kong Air purchase option, the after-tax cash flows are, cost of the V2500 spare engine, the tax shield on depreciation and maintenances costs and the after tax discount rate was used. In case of the lease option, the after-tax cash flows are; include; monthly rental at 8% of engine price, rate per flight hour, rate per engine cycle all over the period of the lease not less than 10 years.(ref) The discount rate used was the after tax cost of debt.

Read More

Financial Case Review: The AIG Scandal 2005

703 Words | 3 Pages

Therefore, there were a few steps taken by Greenberg and Ferguson to make CRD paid $10 million without really paying. Firstly, General RE paid only $7.5 million to commute the existing contract with HSB. Secondly, General RE paid a premium of $9.1 million to NUFIC to reinsure the HSB losses which were just commuted. Thirdly, CRD paid its parent company, General RE a premium of $0.4 million for a fake reinsurance contract. Fourthly, GRD received a loss payment of $13 million from General RE.

Read More

Competitive Case Analysis Of Wilkerson's Company

1770 Words | 8 Pages

Therefore on that basis, all products, including pumps would be generating substantial contribution to overhead and profits. Therefore, given the overhead allocation problems, Wilkerson’s best bet would be to adopt the variable costing method for various reasons, as follows: 1. This cost concept provides a better understanding of the effect of fixed costs on the net profits, due to the fact that total fixed cost for the period is shown on the income statement. 2.

Read More

Persuasive Essay On Pet Insurance Plans

1359 Words | 6 Pages

Insuring your family in case of an accident or illness is the best thing you can do. This is also true for your four-legged family members. Choosing the best pet insurance plan can give you peace of mind and also cut veterinary costs significantly. If you’re thinking of getting pet insurance for cats or dogs, you’re on the right track.

Read More

Airplane Vs Train Research Paper

529 Words | 3 Pages

Among the many methods of transportation available to the public, perhaps it is trains and airplanes that are among the most popular. The train or airplane is a very common choice of travel for many people. One may often pick these methods of transportation when driving a car is not ideal for a situation. Trains and airplanes are designed very differently, but both are adequate ways of traveling. Besides travel, both machines are commonly used for many other purposes as well.

Read More

Alice Inc Case Study Solution

1145 Words | 5 Pages

As you can see in Appendix 1 our analysis revealed that according to new cost accounting system the profitability of Regular model is about 90% whereas profits from selling Deluxe model is about 10%. In the meantime production costs of Regular model is about 45% and Deluxe model is 55%. Thus we may conclude that for Alice, Inc. it is not profitable to produce Deluxe model comparing to Regular model, as costs for production of Deluxe model are higher but the profit is lower.

Read More

More about Pure Train Case Study

Related Topics

Open Document