Quebec Super cheese Company QSC produces many

varieties of cheese #180

Quebec Super cheese Company (QSC) produces many varieties of cheese that are sold in
every province in Canada, mainly through large grocery stores and specialty cheese shops. The
cheese is produced at its factory in Montreal and shipped across Canada using commercial
refrigerated trucks that pick up the cheese at the factory loading dock. The purchasers pay for
the trucking and assume responsibility for the cheese as soon as the trucks pick it up at the
factory. In accordance with IFRS, QSC recognizes the sale as soon as the trucks load the
cheese, because the purchasers have title and responsibility for the cheese at this point.QSC is
not happy with these arrangements because it has received many complaints from purchasers
about spoilage. Even though the purchasers and their truckers have full responsibility for this
spoilage, many disputes have occurred because the truckers insist the cheese is spoiled when
they pick it up. QSC is considering setting up its own feet of trucks to deliver its cheese across
Canada. It estimates that the additional freight costs can be regained through the higher prices
it would charge for including shipping in the price. If the company makes the deliveries, the title
to the cheese will not transfer until the cheese is delivered.Required:Respond to the president’s
concerns about the impact of changing the point at which the company recognizes
revenue.View Solution:
Quebec Super cheese Company QSC produces many varieties of cheese

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