Scafa

Accountancy Department

ACTBAS2 Individual Business Case

Summer Term, Academic Year 2012-2013

Format:

1. Short bond paper

2. 1.5 line spacing

3. One-inch margin on all sides

4. Minimum of three pages, excluding the cover page

5. Font: Times New Roman 12

6. Deadline for submission: May 11, 2013

7. Cover page:

Title of the business case

Presented to the

Accountancy Department

De La Salle University

In partial fulfilment

Of the course requirements

In ACTBAS2 M71

Surname, First name, M.I.

Date

Title of the business case

Presented to the

Accountancy Department

De La Salle University

In partial fulfilment

Of the course requirements

In ACTBAS2 M71

Surname, First name, M.I.

Date

Accountancy Department

ACTBAS2 Individual Business Case

Summer Term, Academic Year 2012-2013

The following events are in chronological order:

1. Adam decides to buy a surfboard.

2. He calls Aussie Surfing Ltd. to inquire about their surfboards.

3. Two days later he requests Aussie Surfing Ltd. to make him a surfboard.

4. Three days later, Aussie Surfing Ltd. sends him a purchase order to fill out.

5. He sends back the purchase order.

6. Aussie Surfing Ltd. receives the completed purchase order.

7. Aussie Surfing Ltd. completes the surfboard.

8. Adam picks up the surfboard.

9. Aussie Surfing Ltd. bills Adam.

10. Aussie Surfing Ltd. receives payment from Adam.

Required:

In a memo to the chief executive officer of Aussie Surfing Ltd, answer the following:

a. When should Aussie Surfing Ltd. record the sale?

b. Suppose that with his purchase order, Adam is required to make a down payment. Would that change your answer?

c. What should Aussie Surfing Ltd. record if Adam realized that the surfboard was damaged when he picked it up and therefore returned it?

Source:

Chalmers, K., Mitrione, L., Yuen, S., Fyfe, M., Weygandt, J. J., Kieso, D., et al. (2010)....