Trailers of the World Has a Small Group of Four

question 29

Multiple Choice

Trailers of the World has a small group of four employees. Trailers take part in a defined contribution plan and pay the required government contribution of 9 per cent plus an additional 4 per cent to reward its employees. Based on the employee earnings below, what is Trailers' superannuation obligation for the year?

• A) $10,920.
• B) $23,660.
• C) $47,320.
• D) $16,380.
• E) None of the given answers.

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Definitions:

Uncollectible

Accounts receivable that are considered unlikely to be collected, representing potential financial losses for a company.

Accounting Standards Update No. 2014-09

Accounting Standards Update No. 2014-09 is a comprehensive new revenue recognition standard issued by FASB, altering the way businesses recognize revenue from contracts with customers.

Revenue Recognition Methods

The principles that dictate the conditions under which revenue is recognized in the accounts, including delivery of goods/services, evidence of an arrangement, fixed or determinable price, and collectability is reasonably assured.

Revenue From Contracts

Income that a company recognizes from the fulfillment of performance obligations specified in contracts with its customers.