Business, 30.10.2019 04:31, ScienceSmartie

Slgnlﬁcant flnanclng component, dellvery before payment. shifty beaver transmission company enters into a contractwith a major us. auto manufacturer to design and produce four-speed transmissions for small suvs- under the terms ofthe contract, shifty beaver will deliver the transmission immediately but the auto manufacturers will defer payment for fouryears, the end of the life of the base warranty. the contract price is $3,500,000 and the interest rate incurred on similarfinancing agreements in the industry is 5%.requlreda. is there a significant financing component in this contract? b- if there is a significant ﬁnancing component, determine the amount of sales revenue and interest revenue to berecognized by shifty beaver.

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Slgnlﬁcant flnanclng component, dellvery before payment. shifty beaver transmission company enters i...