MGAB02H3 Lecture Notes - Lecture 8: Consignee, Dividend, Revenue Recognition
9 Aug 2016
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What are the effects of the issues: provide a recommendation. Joe wants to maximize the company"s potential sale price to be able to gain the most from its sales. There is a conflict of interest between joan and joe because one wants to maximize the buyers value and one wants to minimize it. Revenue recognition conditions: risk and rewards transfer to buyer, ownership transfer to buyer, revenue must be measurable, cost related to earn the revenue must be accounted for, you must make sure all the receivables are collectable. Use as much detail as possible to explain the issues. Objectives is to determine whether he has the necessary finances to obtain his standards: to be able to be financially sound, pay off debt and potentially pay shareholders dividends. Issues: there are implications of stock dividends. Discuss the difference between cash and stock dividend. Stock dividend does not impact debt-equity ratio.
