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AC 5230 Problem Set 2

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AC 5230 Problem Set 2;Instructions;Create a single Excel document with one worksheet/tab for each problem. Each problem is worth 20 points.;Problem 1;On February 1, 2007, York Contractors agreed to construct a building at a contract price of $6,000,000. York estimated total construction costs would be $4,000,000 and the project would be finished in 2009. Information relating to the costs and billings for this contract is as follows;2007 2008 2009;Total costs incurred to date $1,500,000 $2,640,000 $4,600,000;Estimated costs to complete 2,500,000 1,760,000 -0-;Customer billings to date 2,200,000 4,000,000 5,600,000;Collections to date 2,000,000 3,500,000 5,500,000;Directions (20 Points): Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should be recorded for 2007, 2008, and 2009. Create your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.;Percentage of Completion Completed-Contract;Gross Profit Gross Profit;2007 ---------------------------- 2007 ----------------------------;2008 ---------------------------- 2008 ----------------------------;2009 ---------------------------- 2009 ----------------------------;Problem 2;Part A (Part A and B are worth 20 Points all together);Wells Company has a beginning inventory in year one of $300,000 and an ending inventory of $363,000. The price level has increased from 100 at the beginning of the year to 110 at the end of year one. Calculate the ending inventory under the dollar-value LIFO method.;Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.;Part B;At the end of year two, Wells' inventory is $437,000 in terms of a price level of 115 which exists at the end of year two. Calculate the inventory at the end of year two continuing the use of the dollar-value LIFO method.;Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.;Problem 3;The December 31, 2008 inventory of Dwyer Company consisted of four products, for which certain information is provided below.;Replacement Estimated Expected Normal Profit;Product Original Cost Cost Disposal Cost Selling Price on Sales;A $25.00 $22.00 $6.50 $40.00 20%;B $42.00 $40.00 $12.00 $48.00 25%;C $120.00 $115.00 $25.00 $190.00 30%;D $18.00 $15.80 $3.00 $26.00 10%;Directions (20 points) Using the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2008. Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.;Problem 4;Flynt Company was formed on December 1, 2007. The following information is available from Flynt 's inventory record for Product X.;Units Unit Cost;January 1, 2008 (beginning inventory) 1,600 $18.00;Purchases;January 5, 2008 2,600 $20.00;January 25, 2008 2,400 $21.00;February 16, 2008 1,000 $22.00;March 15, 2008 1,800 $23.00;A physical inventory on March 31, 2008, shows 2,500 units on hand.;Directions (20 Points): Prepare schedules to compute the ending inventory at March 31, 2008, under each of the following inventory methods: Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.;(a) FIFO.;(b) LIFO.;Show supporting computations in good form.;Problem 5;A machine cost $500,000 on April 1, 2008. Its estimated salvage value is $50,000 and its expected life is eight years.;Directions (20 Points);Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.;a) Straight-line for 2008;b) Double-declining balance for 2009

 

Paper#35526 | Written in 18-Jul-2015

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