Reference no: EM131002038
On October 15, 1990, United Airlines (UAL Corporation) placed the largest wide-body air- craft order in commercial aviation history-60 Boeing 747-400s and 68 Boeing 777s-with an estimated value of $22 billion. With this order, United became the launch customer for the B777. This order was equally split between firm orders and options.
Required:
a. Comment on when United Airlines should record the purchase of these planes.
b. Comment on when Boeing should record the revenue from selling these planes.
c. Speculate on how firm the commitment was on the part of United Airlines to accept delivery of these planes.
d. 1. Speculate on the disclosure for this order in the 1990 financial statements and notes of United Airlines.
2. Speculate on the disclosure for this order in the 1990 annual report of United Airlines. (Exclude the financial statements and notes.)
e. 1. Speculate on the disclosure for this order in the 1990 financial statements and notes of Boeing.
2. Speculate on the disclosure for this order in the 1990 annual report of Boeing. (Exclude the financial statements and notes.)
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