Assume that a manufacturing company usually pays a waste company(by the pound) to haul away manufacturing waste. Recently, a lan

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6 days ago

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Assume that a manufacturing company usually pays a waste company(by the pound) to haul away manufacturing waste. Recently, a lan

dfill gas company offered to buy a small portion of the waste for cash, saving the manufacturing facility a portion of its disposal costs and providing it with proceeds from the disposal.
The sale of manufacturing waste is not a primary business activity of the manufacturing; however, it will now result in inflow cash.

Which is more appropriate classifying this transaction as an increase in revenue or a decrease in expense, or be recorded as a gain

Assume you are the occupant of a building for which you have just entered into a 2-year lease agreement. Due to the short term nature of the arrangement; the lease will likely be classified as an operating issue.

The FASB is currently proposing fundamental changes to lease accounting, based in part on their view that a lessee’s obligation to make payments over the lease period meets the definition of a liability. Using language from CONN 6, state whether you believe the lessee’s obligation meets the definition of a liability.

Analysis- Why might a lessee’s obligation to meet the definition of a liability?

Business

1 answer:

arsen [3.2K] · Answer 1 · 2026-04-02T14:34:18+03:00

In this scenario, there's no profit involved; it's merely a case of the manufacturing company selling its waste product. Thus, this should be recorded as an increase in revenue and a reduction in expenses. The reduction in disposal costs should be noted as a decrease in expenses, while the income from the landfill gas company purchasing the waste should be recorded as an increase in revenue.