Premium Essay

Cas 4-7 Lighthouse

In: Business and Management

Submitted By jamescobbvelez
Words 1063
Pages 5
The Trueblood Case Studies:
Case 04-7 – Lighthouse

* Lighthouse is a provider of locating services to the shipping industry. Lighthouse’s Ship Finder service is a one-way messaging service that routes messages from the ships at sea to the shipping company’s offices. These messages provide the shipping company with detailed information related to ship location, speed, and current local weather. In order to utilize the Ship Finder service, Lighthouse must install a dedicated hardware unit or device on the ship. Customers generally sign two separate contracts, one governing the sale of the devices and the other governing the provision of the service.
Once the devices are installed (one per ship), Lighthouse will connect the device to its service. Service contracts generally are for 12 months and are billed on a monthly basis. The services are priced at standard rates, although discounts are offered depending on the number of devices sold. The devices also have been sold at a discount. However, the discount is based on the number of units purchased (or to be purchased) and does not appear to be unreasonable.
Standard pricing for the devices and service are as follows:
Product or Service Price
Ship Finder Device $10,000 per unit, MSRP
Ship Finder Service $300 per month, per unit
The Lighthouse devices are made to be used exclusively with the Lighthouse services and, currently, there are no other competitors making devices that work with the Lighthouse services. Customers may cancel the service at any time. However, amounts paid related to the devices are non-refundable. Payments for the devices are due upon completion of the installation and final acceptance by the customer.

* 605 Revenue Recognition 20 Services 05 Overview and Background

Product Maintenance Contracts
An agreement to perform certain agreed-upon services to…...

Similar Documents

Premium Essay

Lighthouse Case 4-7

...Case Study – 2 LightHouse How should revenue be recognized for sales of both the ship finder devices and service? EITF 00-21 states “that in arrangements for multiple deliverables, the delivered item(s) should be considered a separate unit of accounting if all of the following criteria are met: The delivered item(s) has value to the customer on a standalone basis (i.e., it is sold separately by any vendor or the customer could resell the deliverable on a standalone basis) There is objective and reliable evidence of the fair value of the undelivered item(s) If the arrangement includes a general right of return, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the vendor”. In this case it says that lighthouse devices are made to be exclusively with the light house services and there are no other competitors making devices that work with the Lighthouse services. Therefore even if the customer cancels the service at any time the device does not have value to the customer on a stand alone basis therefore revenue can not be recognized by the arrangement with multiple deliverables. According to SAB no, 104 to recognize revenue “Persuasive evidence of an arrangement exists, Delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable and Collectability is reasonably assured”. So the revenue for the Ship Finder Device can be recognized after the completion of......

Words: 300 - Pages: 2

Premium Essay

International Business Pg. 34: 2, 4, 7

...trade has become evermore important to the stability of our national economy, and to the global economy as a whole. Individuals who are going to work for small firms should be aware of where their products are coming from, how much it costs to produce and ship them, etc. Globalization refers to abolishment of ‘economic boundaries.’ Technological advances such as the World Wide Web, cellular phones, and social media have proliferated this phenomenon. This means that we are all players in one, and only one economy…the global economy. Response to #4: Ultimately, there’s no logic found in this statement. Domestic business refers to all trade activity within the borders of our nation, and international business refers to all trade activity that crosses sovereign borders. Understanding where raw materials and finished goods alike are imported from/exported to are vital to understanding the global economy as a whole. Response(s) to #7: a. The manufacturing of flat-panel TVs is migrating to different locations around the world because it is more cost-effective to produce them in low-cost locations. b. The clear winner of the globalization of the flat-panel industry is the US based consumers, as finding the most cost-efficient way to produce them has driven competitors prices down substantially. On the opposite side of the spectrum, the losers of globalization include firms that continue to produce traditional cathode-ray TVs in high-cost locations. c. If the......

Words: 425 - Pages: 2

Free Essay

Freedom Lighthouse

...method. D) Networks enable multiple users to share resources. Points Earned: 1.0/1.0 2. Which network model ensures that no computer on the network has more authority than another? A) client/server B) stand alone C) peer-to-peer D) distributed Points Earned: 1.0/1.0 3. A common way of sharing resources on a peer-to-peer network is by modifying the ____ controls using the computer’s operating system. A) file-serving B) file-sharing C) resource-sharing D) resource-monitoring Points Earned: 1.0/1.0 4. A ____ facilitates communication and resource sharing between other computers on the network. A) servlet B) workstation C) personal computer D) server Points Earned: 1.0/1.0 5. ____ networks are the most popular type of network for medium- and large-scale organizations. A) Client/server B) Peer-to-peer C) Stand-alone D) Stationary Points Earned: 1.0/1.0 6. A ____ network is confined to a relatively small space. A) NAN B) MAN C) WAN D) LAN Points Earned: 1.0/1.0 7. Often, separate LANs are interconnected and rely on several ____ running many different applications and managing resources other than data. A) workstations B) servers C) clients D) stand-alone computers Points Earned: 1.0/1.0 8. A ____ network connects clients and servers from multiple buildings. A) NAN B) MAN C) WAN D) TAN Points Earned: 1.0/1.0 9. A ____ is a specialized device that allows multiple networks or multiple parts of one network to connect and exchange data. A) segment B)......

Words: 903 - Pages: 4

Premium Essay

Economic Chapter 7-4

...Chapter 7: Elasticity 1 What you will learn in this chapter 1. Define and measure elasticity of demand and elasticity of supply. 2. Determine the relationship between demand elasticity and total revenue. 3. Understand the factors that determine elasticity of demand and elasticity of supply. Punchline • Imagine that some event drives up the price of gasoline (think about two examples) • How would consumers respond to the higher price? • By how much would consumption of gasoline fall? Answer to the gasoline question • Many studies have examined consumers’ response to gasoline prices. • Consumption responds more in the long run than it does in the short run. • A 10% increase in the gasoline prices reduces gas consumption by about 2.5% after a year and about 6% after five years. Roadmap 1. Elasticity of demand 2. Measurement of price elasticity 3. Elasticity and total revenue 4. Determinants of price elasticity of demand 5. Other demand elasticity measures 6. Elasticity of supply 7. Determinants of price elasticity of supply Elasticity of demand • The price elasticity of demand is a measure of how much consumers respond to changes in price. • Total revenue that one receives from selling a good is the price of the good times the quantity sold: TR = P*Q • Seller’s dilemma: raise or lower the price? • Can be solved by knowing the elasticity of demand. Measurement of price elasticity • Problem: we cannot measure consumers’ responsiveness to changes in price by looking......

Words: 1298 - Pages: 6

Premium Essay

Case Study 04-07 Lighthouse

...I. Succinct The case present a company named Lighthouse that it business specializes as a provider of locating services for the shipping industry. The services comprise of a one-way messaging service that routes messages from the ships at sea to the shipping company’s offices. The messages provide the shipping company detailed information regarding to ship location, speed and current local weather. The way the system works for gathering the ships data is, by installing a device as a dedicated hardware unit in the ships that serves as tracing device in which Lighthouse rendered the services, Lighthouse will connect the device to its service. Before the Ship Finder service can put in place the company required to customers sign two contracts, one for the sale of the devices and the other governing the provision of the service. The service contracts generally have duration twelve months and are billed monthly, customer may terminate the services at any time but the amounts paid for the devices are nonrefundable. The Lighthouse devices are made to be used exclusively with the Lighthouse services, the standard pricing for the Ship Finder Device are $10,000 per unit (MSRP) and for the Ship Finder Service are $300 a fixed monthly payments per unit. Payments for the devices are due upon completion of the installation and final acceptance by the customer. The services are priced at standard rates although discounts are offered; depending on the number of devices sold...

Words: 4085 - Pages: 17

Premium Essay

Lighthouse

...Lighthouse is a provider of location services that routes messages from the ships at the sea to the shipping company’s offices. Lighthouse provide to their customers the devices that must be install in the ship and the services, but clients need sign separately contracts for each of ones. Service contracts generally are for twelve months and are billed monthly. The standards prices are $10,000 per unit device and $300 monthly per service. Devices are made to be exclusively with the Lighthouse services. Customers may cancel the service at any time, but amounts paid related to the devices are non-refundable. According to the FASB, “Revenues are inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity’s ongoing major or central operations”. According to FASB Codification of Accounting Standards a company should not recognize revenue until “it has performed under the terms of the arrangement” and “unless it will indeed receive and retain payment in a form that has value to the company.” This means that the company has to perform the duty that they have agreed to in their contract and will receive a form of payment in return. The performance of the arrangement can be the delivery of goods, providing services, or providing information. Once a company performs the terms of the arrangement, the revenue is deemed......

Words: 1178 - Pages: 5

Premium Essay

Feminism in to the Lighthouse

...Feminism in TO THE LIGHTHOUSE…………….pg 4 * Conclusion………………………………………………..pg 11 * Bibliography……………………………………………..pg 12 ABSTRACT:          Virginia Woolf is a feminist pioneer and is also a modern socialist master. In her masterpiece To the Lighthouse she uses large number of images to convey her feminist ideas. This Research paper focuses on To the Lighthouse with feminist perspective. How ‘To the Lighthouse’ projects its challenges or realization of productive and creative possibilities of female characters like Mrs. Ramsay, Lily Briscoe, Nancy Ramsay, and other characters who move around these central characters and how these characters are to be studied with the feministic point of view and built as a portrait of real woman in the Victorian England as well as its relevance in the present scenario. Our efforts are to bring out the voice of female characters’ echo in the novel considering these various roles in the novel. INTRODUCTION  In the Post-Modern period, the feministic perspective has been much travelled especially in the writing of female authors or poets. The word ‘servitude’ (Fanon) in the feministic reading has been much taken in to consideration. To the Lighthouse, much discussed, debated and criticized like its length of writing in the panorama of Feminism. The writers’ efforts to portray the real woman as far as milieu and moment are concerned, is to challenge patriarchal family and treatment of woman. Reading To the lighthouse strikes......

Words: 3132 - Pages: 13

Premium Essay

Lighthouse

...In the Lighthouse revenue recognition case, there are two alternatives. The first alternative is that the device and service is a single unit of accounting and both should be recognized as the service is provided. The second alternative is that the devices and services represent two separate earnings processes which need to be recognized separately. Alternative 1. According to FASB 605-25-25-5, there are three criteria that need to be met in order for an arrangement with multiple deliverables to be considered separate accounting units. First, the items need to have standalone value to the customer. Second, there needs to be objective and reliable evidence of the fair value of the undelivered items. Third, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor. According to these terms, the device and service are not separate because they do not have standalone value since the devices are made to be used exclusively with the Lighthouse services and there are no other competitors making devices that work with the Lighthouse services. Therefore the device should be combined with the service and recognized over the service period. Alternative 2. According to FASB 605-10-25-3, revenue should ordinarily be accounted for at the time a transaction is completed, with appropriate provision for uncollectible......

Words: 452 - Pages: 2

Premium Essay

Case 04-7: Lighthouse

...Case 04-7: Lighthouse I. Summary The Lighthouse Company is dedicated to offer services to marine or shipping companies. Their services are based on the tracking and location of the boats of their clients. In order to offer the service, Lighthouse must install an equipment of tracking boats which will have a cost of sale of $10.000,00 dollars, no reimbursable and a tracking system with a monthly cost of sale of $300,00 dollars. This way their clients will continuously receive the data on the location and routes of their boats. The clients must accept this service by means of two contracts. One that stipulates the purchase of the tracking equipment and other that stipulates the monthly fee by the tracking service, usually with duration of a year. Both contracts could have a discount, depending on the amount of services and equipment that is acquired. Lighthouse is the only producer of the tracking equipment and it does not have competitors in the present market compatible with its service. Another factor is that the clients could cancel their services at any time. II. Issue Several factors as services and sale of equipment based on GAAP, entrances of accounting, mercantile right are due to consider. • How are due to recognize the sales and income of Lighthouse, like sale equipment or sale service? • Is the tracking equipment independent of the service? • Is due to consider the income of Lighthouse like a hybrid between equipment and service, like a......

Words: 787 - Pages: 4

Free Essay

Homework Assignment: Chapters 1 Questions 4 and 7

...Week 1 Homework Assignment: Chapters 1 Questions 4 and 7 Cruz A. Morin II Devry University Chapter 1 4. Why does word – of – mouth “advertising” work so effectively? Word – of – mouth advertising works of effectively because it is the simplest way to advertise. When people receive either excellent service or a good deal on a product they will talk about to everyone they know. Companies know this really well and want to ensure that is what is delivered to each customer weather it is a new customer or someone that has been a customer for a long time. Every company wants positive word – of – mouth advertising because it is free to them. The other way that word – of – mouth advertising is being updated now is with the use of social media by everyone. Besides regular social media sites you also have review sites that people post both good and bad reviews on (ex. YELP). 7. What do we mean by an “engaged” customer, and how does this relate to customer loyalty? An “engaged” customer is someone who feels that they have an emotional tie to the company that they are doing business with. Most companies will use loyalty programs to in a way entice customers to keep returning. When extremely satisfied customers have been asked if they felt an emotional tie and many said no. If a company wants to truly rise the level of customer loyalty they have to increase the emotional tie in that each customer fills and at the end of the day if there is no tie in with the emotions then...

Words: 298 - Pages: 2

Free Essay

Fs 2 Episode 4-7

...you. 4. Fold the right end up to meet the far corner, ensuring the edge of this new fold lays on     the centerline as shown. 5. Repeat the last step with the left side, folding the left tip up to the far corner, creating a diamond shape with a seam running down the center. 6. Turn the napkin over, keeping the open end facing away from you. 7. Fold the napkin in half by bringing the farthest point of the diamond up and back to the nearest point. 8. Turn the napkin over again, this time keeping the open end facing towards you. 9. Fold the napkin along the center seam and you have a neat, sturdy pyramid. If your napkin won't stand neatly then you may need a little starch. •          The Arrow Napkin Folding - This method of folding napkins is very simple and can be done with almost any napkin without a need for starch. It adds a flowing, elegant look to your table. 1. Lay the napkin face down in front of you. 2. Fold the napkin in half and orient the open end towards you. 3. Fold the far-right corner over to the center of the side that is closest to you. The edge of this fold should run down the center of the napkin. 4. Repeat the last step with the other side, folding the far-left corner in to rest along side the previous fold. 5. Fold the right-flap out diagonally so that it's outer edge runs even with the far edge of the napkin. 6. Repeat the previous step on the other side, folding the left-flap out diagonally to  meet the far edge of the napkin. 7. Slide...

Words: 2474 - Pages: 10

Free Essay

Music 110 - Main Points in Chapter 4-7

...Dance from Senegal, a piece that represents West African folk dance music in its entirety. We are told by the author to listen to the rhythm and note whether or not it changes the pulse. When I hear this song I can feel the beat getting faster and faster which energizes the song and makes me feel that way as well. The drums create the beat and you can’t help but feel energized along with the changing rhythm. The “4th Movement” in Felix Mendelssohn’s Symphony #4 includes a Saltarello at the end, which is fast triple meter dance. This incorporates a jumping motion (Chiego p.108). When I listen to this song I listen to the melody and which sets the feeling of the song. I feel like this song is very quickly paced and light. It is upbeat and makes listening to it enjoyable. Additionally, I appreciated the Dance of the Skeleton, not only for its music but for the history and explanation of the song. The Tibetan Buddhist monks preform this sacred dance during religious rituals, in order to ward off evil spirits (Chiego p. 4). For this song, we are told to listen to the beat or rhythm. While this is hard to do because the song doesn’t seem to take on a specific form, I still found the culture of it to be very interesting. The final piece I enjoyed listening to was Ozatsuma, which is a traditional Japanese Shamisen piece that can usually be found in Japanese Kabuki theatre. This type of music is more simplistic than most but it serves to dramatize the scenes in the theatre.......

Words: 571 - Pages: 3

Free Essay

Crj 320 Wk 4 Quiz 4 Chapter 6 and 7

...CRJ 320 WK 4 QUIZ 4 CHAPTER 6 AND 7 To purchase this visit here: http://www.activitymode.com/product/crj-320-wk-4-quiz-4-chapter-6-and-7/ Contact us at: SUPPORT@ACTIVITYMODE.COM CRJ 320 WK 4 QUIZ 4 CHAPTER 6 AND 7 CRJ 320 WK 4 Quiz 4 Chapter 6,7 MULTIPLE CHOICE 1. In addition to physical evidence, three primary sources of information are available: a. dispatchers, first responders and records clerks. b. reports, records and databases; people who are not suspects in a crime but know something of the crime; and suspects in the crime. c. reports, records and witnesses. d. snitches, rats and informants. 2. The ultimate goal of interviewing and interrogating is to a. identify the person who is to be arrested. b. identify those responsible for a crime and eliminate the innocent from suspicion. c. ensure proper punishment. d. eliminate the innocent. 3. Two basic requirements for obtaining information are to a. listen and observe. c. observe and analyze. b. listen and respond. d. assess and evaluate. 4. Which of the following questions is most direct? a. “Were you around the area of the corner of 5th and Main last night?” b. “Where were you last night?” c. “Did you assault George Smith at 5th and Main last night?” d. “Why did you assault George?” 5. When conducting an interview, you should a. interview all witnesses at once. b. give first consideration to eyewitnesses. c. give the Miranda warning first. d. interview the victim or complainant......

Words: 2043 - Pages: 9

Premium Essay

Cis 210 Week 7 Assignment 4 Str

...CIS 210 WEEK 7 ASSIGNMENT 4 STR TO purchase this tutorial visit following link: http://wiseamerican.us/product/cis-210-week-7-assignment-4-str/ Contact us at: SUPPORT@WISEAMERICAN.US CIS 210 WEEK 7 ASSIGNMENT 4 STR Strayer CIS 210 Assignment 4: Databases Due Week 7 and worth 100 points You are working as a corporate trainer for a large organization. There are several other trainers and many training topics. The company has grown quickly and scheduling has become difficult. The current method for scheduling involves writing trainer names and courses on a dry-erase board. This has led to issues with trainers changing the assignments in their favor and accidental erasure of some course assignments. Write a 4-5 page paper in which you: 1. Discuss the requirements needed to build a database for the scheduling process. 2. Describe the advantages and disadvantages of moving the schedule to a database. 3. Create a graphical representation of your proposed database environment. 4. Explain how referential integrity can prevent mistakes in a database, and do the advantages outweigh the difficulty of setting it up? 5. Impress your boss by creating a database in Microsoft Access that will match trainers with courses and meet the following requirements: a. Two (2) tables, one (1) containing trainer information and the other containing course information. Create data for five (5) instructors and five (5) courses. The trainer data should include: employee ID number, last name,...

Words: 786 - Pages: 4

Free Essay

To the Lighthouse

...To the Lighthouse Woolf, Virginia Published: 1927 Categorie(s): Fiction Source: http://gutenberg.net.au 1 About Woolf: Virginia Woolf (January 25, 1882 – March 28, 1941) was an English novelist and essayist regarded as one of the foremost modernist literary figures of the twentieth century. During the interwar period, Woolf was a significant figure in London literary society and a member of the Bloomsbury Group. Her most famous works include the novels Mrs Dalloway (1925), To the Lighthouse (1927), and Orlando (1928), and the book-length essay A Room of One's Own (1929) with its famous dictum, "a woman must have money and a room of her own if she is to write fiction". Also available on Feedbooks for Woolf: • Mrs. Dalloway (1925) • A Haunted House (1921) • The Waves (1931) • Mrs Dalloway in Bond Street (1923) • Between the Acts (1941) • The New Dress (1927) • The Mark on the Wall (1917) • The Duchess and the Jeweller (1938) • The Years (1937) • An Unwritten Novel (1920) Copyright: This work is available for countries where copyright is Life+70. Note: This book is brought to you by Feedbooks http://www.feedbooks.com Strictly for personal use, do not use this file for commercial purposes. 2 Part 1 The Window 3 Chapter 1 "Yes, of course, if it's fine tomorrow," said Mrs Ramsay. "But you'll have to be up with the lark," she added. To her son these words conveyed an extraordinary joy, as if it were settled, the expedition...

Words: 71296 - Pages: 286