Accounting assignment

_ACCOUNTING ASSIGNMENT

The Baldwin uses the critical events in to recognize revenue from the sale of the inventory for its different business segments . The first is of when the dealer sales the instrument to the third party where in the company charges a monthly display fee on the consigned inventory The Second constitutes of the Other operating income ' where the independent dealers are given room to principal line but the government gets its share from all the installment contract receivables . Thirdly is income on the sales of the installment receivables rating different

from the independent financial institutions after the government entering into an agreement using a repurchase deal . Additionally the company recognizes the revenue during shipment to dealers and customers . Lastly the company gets the revenue by pledging the instrument as collateral and they are purchased using the borrowed money from the bank on which there is monthly interest repayments and payment of the inventory if held more than twelve months

Other recognition methods that satisfy the critical event and measurability so far included sales of receivable installments of the inventories which accounted to profit and loss at some points for instance smoke from a fire adjacent to the warehouse caused damaged of the finished goods making the company incur a loss . Secondly , the company recognized some revenues from the receivable insurances which were equal to wholesale value of the destroyed inventory hence boosting the company to recover from loss making to profit making . Thirdly the company entered into agreement in principal with peridot Associates Inc . which acquired all the outstanding shares of the company 's common stock at a price of 18 .25 resulting to more incurring the loss

The sources of change in Baldwins profitability emerged when the company 's finished goods warehouses were damaged by exposure to smoke from a fire adjacent to the warehouse . After which the company received insurance proceeds equal to the wholesale value of the destroyed inventory making resulting to a profit of 1 ,412 ,000 . These can be attributed in future to help the company recover from accidents and recover from making losses

Reference

1 . Intermidiate Accounting , Spiceland (5th Edition Chapter 1 (2005 ) By S . Kertler

_ACCOUNTING ASSIGNMENT...