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Module 1 Problem ?Solution Assignment




Question;Module 1 Problem ?Solution Assignment:Problem 1Red 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 thefollowing 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 finalpayments 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:1Prepare the journal entries to record the sales, cash collections and recognition of gross profit only if appropriate in the years 2010 and 2011.Problem 2Alpha 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 otherdata are shown below:Alpha Great Construction is using the percentage of completion method to recognize revenue:Requirements:2Compute the amount of gross profit recognized in 2010 and 2011


Paper#39810 | Written in 18-Jul-2015

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