Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Accounting Basics Expert

Flash Newton is national sales director aat Bright and SHinyToothpaste Company. Tge firm manufactures and distributes afull line of premium-priced personal care products sold through acarefully selected set of distributors nationwide. Thepopularity and profit margins of the Bright and Shiny product linemake distributorships very profitable and there is intensecompetition when one becomes available. Flash, and the other regional sales directors working for him,are compensated by a base salary and a significant bonus tied topercentage increases in yearly sales. Because of an impendingrecession, sales have been mostly flat during the first threequarters of the year. On October 3, Flash convineddistributors with Birght and Shiny's newest dales plan. Alldistributors would be required to buy, during the 4th quarter, upto 2 years worth of inventory of th firm' products. Further,the prices charged on these special purchases would be 10% greaterthan usual. Any distributors not agreeing to the proposalwould automatically lose their distributorship. Because mostdistributors are not expected to have cash readily available to payfor these additional purchases under the usual 30- day creditterms, Bight and Shiny will allow up to 12 months to pay. The new policy has been a huge success and by year end, totalorders and shipments to distributors are up by 12 % over theprevious year. Bight and Shiny recorded all shipments asrevenuee even though some distributors were told by lower-levelmanagers that they could return unsold products. Because manydistributors could not handle the large shipments in their usualstorage facilities, many orders have been shipped to third-partyware houses for storage sales program, the company held the booksopen for a few days after December 31 to obtain and ship additionalorders. Identify and explain any problems you see with the salesplan. If you were Bright and Shiny CEO, which aspects of the sales plan would you have approved and which would you havedenied. Why?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9992747

Have any Question?


Related Questions in Accounting Basics

Question - jabiru corporation purchased a 20 interest in

Question - Jabiru Corporation purchased a 20% interest in Fish Company common stock on January 1, 2002 for $300,000. This investment was accounted for using the complete equity method and the correct balance in the Inves ...

Question - alpha corp was organized on january 2 2018

Question - Alpha Corp., was organized on January 2, 2018. During the first year of operation, Alpha issued 100,000 shares of $1 par value common stock at a price of $50 cash per share. On December 31, 2018, Alpha reporte ...

Question revenue from contracts with customers

Question: Revenue From Contracts With Customers Examples Part I: For each of the scenarios determine if a contract exists by applying the 5 requirements for a contract to exist under ASC 606. 1. For each of the following ...

Question 1what is the difference between revenue

Question: 1. What is the difference between "Revenue Expenditures" and "Capital Expenditures"? 2. Why is it important to distinguish between these two concepts in terms of the Income Statement? 3. List an example of an i ...

Question please respond to the followingfor this weeks

Question: Please respond to the following. For this week's collaborative activity, review Apple Inc.'s most recent financial statements. Apple's Financial Information. Based on your analysis of Apple's most recent financ ...

Question 1 compare companys net income to its cash provided

Question: 1. Compare company's net income to its cash provided by operating activities for the most recent year-end. Which is larger? 2. Compare company's net income over the last two reporting periods. Next, compare com ...

Question - eagle owns 80 of flyways common stock that was

Question - Eagle owns 80% of Flyway's common stock that was purchased at its underlying book value. The two companies report the following information for 2004 and 2005. During 2004, one company sold inventory to the oth ...

Question - dave has had a really good idea for a marketing

Question - Dave has had a really good idea for a marketing campaign for the business he works for. Unfortunately, he is been too busy to write down the idea but he tells his boss Mary about it all the same. Mary writes u ...

Question - robin corporation purchased 150000 previously

Question - Robin Corporation purchased 150,000 previously unissued shares of Nest Company's $10 par value common stock directly from Nest for $3,400,000. Nest's stockholder's equity immediately before the investment by R ...

Question - an entity is converting its accrual-based

Question - An entity is converting its accrual-based accounting records to a cash basis. The amount of $53 000 (including $7 000 depreciation) was shown as 'Other expenses' in the statement of profit or loss. On inspecti ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As