Vince Leader: Group Activity ACCT 284 (CD) Course: February 24th, 2016 Supplemental Instruction Clem Instructor: Iowa State University Cyclone Chocolates is a local chocolate shop that also has a website on which it sells its chocolate. The 2010 annual report for Cyclone Chocolates contained the following phrase: operation records revenue upon the estimated customer receipt “Our e-commerce date of the merchandise.” Given this information, does Cyclone Chocolates ship items in terms of FOB shipping point or FOB destination? If the company were to change to the other terms of shipment, would it report sales revenue earlier or later? is a major retailer which provides merchandise and services to customers through Cy’s department stores. In 2010, reported the following information on its financial Cy’s statements: Cost of Goods Sold $11,571 million Ending Inventory (current year) 3,259 million Ending Inventory (prior year) 3,641 million If you knew that the cost of inventory purchases was $11,289 million, could you estimate the cost of shrinkage during the year? If so, prepare the estimate, and if not, explain why. Which of the following statements is not correct? When goods are shipped FOB shipping point, the sale is recorded when the goods leave the shipping department. seller’s When goods are shipped FOB shipping point, the seller usually pays for all transportation costs. When goods are sold, the transfer of ownership occurs at a time specified in the written sales agreement. Merchandisers earn revenues by transferring ownership of merchandiuse to a customer, either for cash or on credit.
Group Activity February 24th, 2016 Supplemental Instruction Iowa State University Leader: Vince Course: ACCT 284 (CD) Instructor: Clem Cyclone Chocolates is a local chocolate shop that also has a website on which it sells its chocolate. The 2010 annual report for Cyclone Chocolates contained the following phrase: “Our e-commerce operation records revenue upon the estimated customer receipt date of the merchandise.” Given this information, does Cyclone Chocolates ship items in terms of FOB shipping point or FOB destination? If the company were to change to the other terms of shipment, would it report sales revenue earlier or later? Cy’s is a major retailer which provides merchandise and services to customers through department stores. In 2010, Cy’s reported the following information on its financial statements: Cost of Goods Sold $11,571 million Ending Inventory (current year) 3,259 million Ending Inventory (prior year) 3,641 million If you knew that the cost of inventory purchases was $11,289 million, could you estimate the cost of shrinkage during the year? If so, prepare the estimate, and if not, explain why. Which of the following statements is not correct? When goods are shipped FOB shipping point, the sale is recorded when the goods leave the seller’s shipping department. When goods are shipped FOB shipping point, the seller usually pays for all transportation costs. When goods are sold, the transfer of ownership occurs at a time specified in the written sales agreement. Merchandisers earn revenues by transferring ownership of merchandiuse to a customer, either for cash or on credit.