The following disclosures (excerpted) are from the September 2, 2018, annual report of Costco Wholesale Corporation.

Business

1 answer:

Norma-Jean [14]2 years ago

6 0

Answer:

Which of the following statements best explains in layman terms how Costco accounts for the cash received for its membership fees?

b. When it receives cash, the company records it as a current liability. Then, it recognizes revenue evenly over the year.

Explanation:

The first part of the question clearly states that Costco reports membership fees as unearned revenue. As time passes, and the fees are accrued, it recognizes them as earned revenue. Since the membership fees last for a year, Costco recognizes the revenue associated to them evenly throughout the whole year.

Membership fees are not static, as some fees expire, new ones are received. That is why the membership fees account does not vary significantly during the year, but instead it should follow a relatively stable path.

You might be interested in

A vintner is deciding when to release a vintage of Sauvignon Blanc. If it is bottled and released now, the wine will be worth $2

Alex_Xolod [135]

Answer:

The difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year or if he releases the wine now is $ 328,972

Explanation:

According to the given data we have the following:

Value if the wine is released now = $2.2 m = $2,200,000

Value of the wine after 1 year = $2,200,000×1.15%= $2,530,000

Additional Cost = $528,000

Interest Rate = 7%

Hence, Value of the wine now =($2,530,000- $528,000) / (1+0.07)

Value of the wine now =$1,871,028

Therefore, The difference = $2,200,000 -$1,871,028

The difference =$328,972

The difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year or if he releases the wine now is $ 328,972

6 0

2 years ago

Exercise 6-5 (Algo) Performance obligations [LO6-2, 6-4, 6-5] On March 1, 2021, Gold Examiner receives $156,000 from a local ban

kirill [66]

Answer:

stisgksgksgkdkhclhlfjfpj

5 0

2 years ago

Reducing alcohol-related crashes in florida by 10% would save more than $__________ million in claims payments and loss adjustme

Andrei [34K]

I believe the answer is $180 million.
This amount took around 17% of the total amount of insurance claim that happened within the state.
This high amount is correlated to the fact that Florida containt a lot of tourist night clubs/bar which increase the likelihood of drunk driving activities.

3 0

2 years ago

Read 2 more answers

Professor pott emphasizes that normal depression serves an adaptive function by slowing people down and preventing them from eng

NemiM [27]

The caring perspective

5 0

2 years ago

At a time when demand for ready-to-eat cereal was stagnant, a spokesperson for the cereal maker Kellogg’s was quoted as saying,

larisa86 [58]

Answer:

for interest rates equal to or lower than 200%, the firms will use trigger strategies to support the collusive level of advertising

Explanation:

Using the below expression to determine the range of interest rates could these firms use trigger strategies to support the collusive level of advertising; we have:

$\frac{current \ period's \ profit \ of \ the \ cheating \ firm \ - \ firm's \ profit \ in \ each \ period \ under \ collision }{ firm's \ profit \ in \ each \ period \ under \ collision \ - \ profit \ in \ each \ subsequent \ period \ of \ cheating \ firm } \leq \frac{1}{i}$