adms1000 Lecture Notes - Lecture 8: Deferred Income, Marginal Revenue, Down Payment
Document Summary
Here is the information that you have requested me. All my recommendation is based on aspe standards. We recognize that you are concerned about debt to equity ratio, hence we have provided the treatment that best improves the ratio. He(cid:374)ce, it is recommended to reverse the amount of revenue recognized until the performance obligation of providing cruises has been met: dr. revenue and credit to unearned revenue, for non-refundable booking revenue, similar treatment should be done. Recognizing revenue when the performance obligation is met: advertising expense, promotional offers are given to travel agents when facilities are not fully booked. These cost should be capitalized and depreciated over its useful life: room renovation: (400,000x4/5)+(700,000x1/5)= ,000, common areas (600,000x1/3+750,000x1/3)= Increase in renovation cost by 210,000: damage due to storm, unusal gain from insurance claim should be reported separately from the results from operation, this would lower the marginal operating loss than operating losses of prior years .
