Description of this paper

Compute the amount of gross profit recognized in 2010 and 2011

Description

solution


Question

Module 1 Problem-Solution Assignment;Problem 1;Red Sox Company has the following sales of land and cash collections;In 2010, there was the sale of Bux Land for $3,000,000 that cost them $1,500,000. The purchase agreement required that payments be made of $1,200,000 when there are tenants on the land and the following payment of $1,200,000 be made in 2011.;In 2011, there was the sale of Spokane County land for $2,700,000 which cost Red Sox $1,800,000. The payments were required were $900,000 when development started on the land and then the final payments of $600,000 in 2012 and 2013. Red Sox had cash collections of the $900,000 and a payment of $700,000 for Bux Land.;Additional Facts;You will assume that Red Sox Company can estimate with ease the uncollectible accounts and then accrues the bad debts of 7% of sales and will recognize the revenue upon the transfer of title.;Requirements;1 Prepare the journal entries to record the sales, cash collections and recognition of gross profit only if appropriate in the years 2010 and 2011.;Problem 2;Alpha Great Construction was the best selection to build the Stoddard Temple for the amount of $2,500,000. The project broke ground in 2010 and was then completed in 2011. Below the cost and other data are shown below;Alpha Great Construction is using the percentage of completion method to recognize revenue;Requirements;2 Compute the amount of gross profit recognized in 2010 and 2011

 

Paper#24113 | Written in 18-Jul-2015

Price : $27
SiteLock