Accounting - Case studies
* Michelle grows persimmons, a type of fruit, in her orchard. This
activity includes a number of tasks: she has to prune in winter, water in
summer, and pick, polish and pack in May. The bulk of the fruit is sold in
Last year she averaged $5 per carton on the 300 cartons she sent to
market. However, this year has been a good year for growing and with a glut
of fruit the price may fall.
Discuss the appropriate realisation point for Michelle, assuming
accounting periods of one month.
* Craig has a contract to build 40 prefabricated huts for the army at $30
000 per hut. His accounting period is for three months. On 1 June, the
first day of the new period, he has partly completed (50%) three huts.
During June, July and August he commences building work on ten huts, in
addition to completing the three in progress at the beginning of June. Of
the 10 huts he commenced building in this period, two remain uncompleted
(50%) on 31 August.
* Melanie contracts to make woollen jumpers. She charges $100 per jumper.
Her accounting period extends from January to June. She presents you with
the table below and asks you to determine her revenue using each of the
different realisation points.
$ RECEIVED FOR
View the text document for solution to case studies on revenue recognition
View the text document for related questions to depreciation.
View the text document for solution to depreciation.
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