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Bythindseitty : BIKE Company starts with $3,000 to finance its business plan of producing bike helmets using a simple assembly process. During the first month of business, the company signs sales contracts for 1,300 units (sales price of $9 per unit), produces 1,200 units (production cost of $7 per unit), ships 1,100 units, and collects in full for 900 units. Production costs are paid at the time of production. The company has only two other costs: (1) sales commissions of 10% of selling price when the company collects from the customer, and (2) shipping costs of $0.20 per unit paid at time of shipment. Selling price and all costs per unit have been constant and are likely to remain the same.

Required:
a. Prepare comparative (side-by-side) balance sheets and income statements for the first month of BIKE Company for each of the following three alternatives:
(1) Revenue is recognized at time of shipment.
(2) Revenue is recognized at time of collection.
(3) Revenue is recognized at time of production.

Hint: Net income for each of these three alternatives is (1) $990, (2) $810, and (3) $1,080, respectively.

Attempt at solution:
(1) Sales revenue (1,100*$9)=$9,900
COGS (1,100*$7)=$7,700
Gross margin = $2,200
Sales commissions (900*$9*10%)=$810
Shipping costs ($0.20*1,100)=$220
Income = $1,170



(2) Sales revenue (900*$9)=$8,100
COGS (900*$7)=$6,300
Gross margin = $1,800
Commissions (900*$9*10%)=$810
Shipping costs (1,100*$0.20)=$220
Income = $770

(3) Sales revenue (1,200*$9)=$10,800
COGS (1,200*$7)=$8,400
Gross margin = $2,400
Commissions (900*9*10%)=$810
Shipping costs (1,100*$0.20)=$220
Income = $1,370

Details: I can't figure the income statement out to save my life. There is no mention of a tax rate, so I assume that the net income hint given is pretax. If anyone can help me get at the right direction, that would be great. I can probably get the balance sheet done myself if I get to the right net income to apply to retained earnings.

There are two other questions as well:

b. The method where revenue is recognized at time of collection, known as the installment method, is acceptable for financial reporting in unusual and special cases. Why is BIKE Company likely to prefer this method for tax purposes?

c. Comment on the usefulness of the installment method for a credit analyst in using both the balance sheet and income statement.
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  #2 ()
TAmbillaImmith : I have an iPhone 3GS and a few days ago I took off the screen to fix a problem I'd been having with the mute button clicking all the time. I noticed After I put the screen back on, I couldn't hear people whilst I was on the phone to them. It works if I put the phone on speaker but how do I fix the private call speaker? Thanks
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  #3 ()
centbancdeshallland : my blackberry messenger is sending messages OK (slow though) and its not showing as sent on my phone until they actually reply. The thing I want sorting though is my VN (voice notes) they aren't sending...I can do them, and press send, but they wont send, then they will cancel the sending its self, im also finding it hard to send files,eg/ photos, music etc. They will sometimes send, but not always, and when I send a vn, itll send once and then when I try do another after that it wont let me, this normally happens when I reset my phone that itll send one and then not the rest. I've tried pulling the battery out and stuff. someone help?i seen something on the internet about data plan? but I already have that, that's obviously how my bbm works, but does it need updating or something :S any other ideas though on what it could be other than that? thankyou so much guysxxxxxxxx
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  #4 ()
MymnIntatte : I need unlock iphone 5, please let me know any website address or anybody want to sell.
Thanks
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  #5 ()
ciggriecosy : Apple Stores sell them unlocked.

store.apple /us/browse/home/shop_iphone/family/iphone5
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  #6 ()
prieneupe : Craigslist
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  #7 ()
Creweemaima :
:
I need unlock iphone 5, please let me know any website address or anybody want to sell.
Thanks
You can approach Unlock-zone.com and get the remote unlock service for iPhone 5. You need to specify the country,locked network and based on the availability get the network restriction removed permanently.
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  #8 ()
PartVarkBot : So.... i currently use an android phone nd the carrier i have is Virgin Mobile. Ive always wanted an iPhone. I want to get an iPhone because my current phone is having problems but idk if i should wait a couple of months for the iPhone 5c or juss get the iPhone 5 now! Do u think its worth the wait for the iPhone 5c??? THANKS FOR YOUR HELP!!! :)
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  #9 ()
goodevry13 : No.
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  #10 ()
csyez013 : iPhone 5 is not a nice iPhone, opt for another one.
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