Kitchen Aid

Research Case
Kitchen Aid
Kitchen Aid (KA) manufactures cordless mixers for use in the kitchens of consumers. KA sells to retailers,
who sell the mixers to the ultimate consumer. One of KA’s retail customers is Jones Kitchenware (JK). On
January 1, KA sells to and receives payment from JK for 100 cordless mixers with a one-year warranty for
$50 each. The mixers are delivered by KA to JK upon receipt of payment and the warranty is initiated at
that time. This warranty provides for a replacement of the mixer if the mixer fails to work properly. KA
also sells its mixers with no warranty for $40 per unit. The cost to manufacture each mixer is $32.
KA also provides its retail customers with sales incentives in the form of volume discounts on purchases
of mixers with warranties paid at the end of an annual period. The agreement between KA and JK
provides for the following volume discounts. Additionally, the probability of purchases for each volume
level as estimated by KA is provided based on historical experience and forecasted sales.
Number of mixers purchased Discount Probability
Less than 1,000 0.00% 35.00%
1,000 through 1,999 3.75% 40.00%
2,000 or more 10.00% 25.00%
The discounts are retroactive. If 2,000 mixers are purchased during the year, a discount of 10% will be
applied to all 2,000 mixers.
► Prepare a memo (approximately 2 pages) detailing your proposed accounting treatment, including
references to the ASC with in-text citations. Go through each of the 5 steps for revenue recognition and
provide detailed discussions. Specifically, is there a valid contract? How many performance obligations
are there? How does the seller determine the transaction price? If necessary, how do we allocate the
transaction price? Lastly, when does the seller recognize revenue? Attached to the memo, record all
initial accounting entries for KA for the month of January. Include all calculations to support your work.

Don't use plagiarized sources. Get Your Custom Essay on
Kitchen Aid
Just from $13/Page
Order Essay
Calculate your order
275 words
Total price: $0.00

Top-quality papers guaranteed


100% original papers

We sell only unique pieces of writing completed according to your demands.


Confidential service

We use security encryption to keep your personal data protected.


Money-back guarantee

We can give your money back if something goes wrong with your order.

Get free features with our reliable essay writing service

  1. Title page

    We offer you a free title page tailored according to the specifics of your particular style.

  2. Custom formatting

    Include your preferred formatting style when you order from us to accompany your paper.

  3. Bibliography page

    Get a list of references to go with your ordered paper.

  4. 24/7 support assistance

    Reach out to our support agents anytime for free assistance.

Calculate how much your essay costs

Type of paper
Academic level
550 words

How to place an order

  • Choose the number of pages, your academic level, and deadline
  • Push the orange button
  • Give instructions for your paper
  • Pay with PayPal or a credit card
  • Track the progress of your order
  • Approve and enjoy your custom paper

Ask our experts to write you a cheap essay of excellent quality

Place an order