Amazon.com, Inc. operates a global e-commerce platform and follows the revenue recognition principle to determine...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Amazon.com, Inc. operates a global e-commerce platform and follows the revenue recognition principle to determine when to recognize revenue from its sales transactions. Consider the following scenario for the fiscal year ending December 31st, 2023:
On January 1st, 2023, Amazon sold a variety of electronic devices, including smartphones, tablets, and smartwatches, through its online platform. The total sales revenue generated from these transactions amounted to $10,000,000. However, due to the nature of e-commerce sales, not all goods were immediately shipped to customers.
The breakdown of sales revenue and related shipping terms for each category of electronic devices sold is as follows:
Smartphones:
Total sales revenue: $5,000,000
Shipping terms: Free shipping to customers' addresses
Estimated shipping time: 3 to 5 business days
Estimated delivery completion: March 1st, 2023
Tablets:
Total sales revenue: $3,000,000
Shipping terms: Standard shipping at a flat rate of $20 per device
Estimated shipping time: 5 to 7 business days
Estimated delivery completion: February 15th, 2023
Smartwatches:
Total sales revenue: $2,000,000
Shipping terms: Expedited shipping at a flat rate of $30 per device
Estimated shipping time: 2 to 3 business days
Estimated delivery completion: February 5th, 2023
Amazon's policy is to recognize revenue when goods are shipped and title passes to the customer, which typically occurs upon delivery. Additionally, Amazon accounts for shipping and handling fees separately from the sales revenue.
Based on the above information, calculate:
The total revenue to be recognized by Amazon.com, Inc. for the fiscal year ending December 31st, 2023, from the sale of electronic devices.
The portion of revenue to be recognized in the first quarter (January 1st to March 31st), second quarter (April 1st to June 30th), third quarter (July 1st to September 30th), and fourth quarter (October 1st to December 31st) of the fiscal year for each category of electronic devices sold.
The total shipping and handling fees Amazon.com, Inc. will recognize for the fiscal year ending December 31st, 2023.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!