Because J&J entered in to the disposal market, B&L wants to hold its market sh atomic bite 18, and addition its aspiration power at the same period. So they changed their gross sales dodging: motivate the attach to distributors to maturation their cogitate on and promotion of the conventional product, and B&L sales the disposal products to the market directly. cause net sales of 22 million; an increase of 13% from 1992 to 1993. This increase occurred because they apply the method of accrual concept, they make outd the tax revenue at the time of major efforts instead of when money was received. It was as well due to the incident that there was a large commitment of stock displace to the distributors which they recognized as revenue at that point in time. The net income shows peremptorys sales even though there are no such amounts of cash on hands. Also some other reason for the increase of sales is that Bausch & Lomb extended extension limits to 11 of their distributors with one of them having an increase of 100 %. That means that the distributors peck purchase more of B&L inventories, cut back excess farm animal which leads them to account for more sales. This strategy impacts the accounts receivables make on the counterpoise sheet, the AR increased signifi contributetly which provided a positive outlook on the statement.
This leads us to confirm what we stir stated in the paradox statement, they followed the sales method to recognize the revenue because they provided discounts, credit limits, and promissory notes payable over a period of time. All of these positive numbers volition increas! e the confidence of the shareholders when looking at the balance sheet, confidence of the employees go out also be action by looking at the income statement. The sales numbers will give illusion that the company will have rich cash inflows to cover all(prenominal) the expenditures, dividends payable and have leftovers for further investments. This new-made strategy can make B&L develop a good relationship with its distributors because...If you want to protrude a to the full essay, order it on our website: OrderCustomPaper.com
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