Xanetics, Inc., recently received a $150,000 special order from Lartech, Inc., for some customized equipment. A 50 percent deposit accompanied the order, with the remaining $75,000 payment to be made at delivery. Xanetics manufactured the equipment and was ready to ship it to Lartech when it was notified that Lartech had declared bankruptcy.
Identify the accounting issues related to the above scenario. Has Xanetics earned a revenue?
Has it been realized? Should the company recognize any revenue?
Hills Dog Food generated revenues of $5,000,000 during 2010 by selling 1,000,000 bags of dog food. The master budget of Hills shows expected sales of 1,200,000 bags of dog food generating $5,760,000 in revenue.
What are the sales price and sales quantity variances?