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accounting problems




Question;1. (TCO A) Platypus;Building Inc. won a bid for a new office building contract. Below is info from;the project accountant;Total;Construction Fixed Price $8,000,000;Construction;Start Date March 3;2012;Construction;Complete Date December 4;2013;As;of Dec 31? 2012 2013;Actual;cost incurred $2,500,000 $3,150,000;Estimated;remaining costs $3,750,000 $-;Billed;to customer $2,400,000 $5,300,000;Received;from customer $2,250,000 $5,400,000;Assuming Platypus;Building Inc. uses the completed contract method, what amount of gross profit;would be recognized in 2013?;1.;$2,000,000;2.;$2,350,000;3.;$1,650,000;4.;$940,000;2. (TCO A) Kerry Corp purchased a used bottling machine from Bob's Bottling;Inc. on Jan 1, 2012 for $2,100,000. Bob accounted for the sale correctly under;the installment sales method. It had a book value of $1575000. Kerry paid with;$300000 cash and a note for $1800000 with an annual interest of 10%. Kerry;agreed to make equal annual payments of $600000. Kerry Corp made their first;payment on Jan 1, 2013 of $780000 which included interest of $180000 to date of;payment.;As;of Dec 31, 2013 Bob has deferred gross profit of?;1.;$255,000;2.;$330,000;3.;$375,000;4. $300,0003. (TCO A) Blue;Suede Construction Corp used the percentage-of-completion method of revenue;recognition. They were contracted to build the new amphitheater for $800000.;Additional information was provided;As;of Dec 31?. 2012;2013;Percentage;of completion 15% 40%;Estimated;total expected costs $550,000 $580,000;Gross;profit recognized (Cumulative) $50,000 $99,000;Contracted;costs incurred during 2013 were? (Points;5);1.;$145,000;2. $149,500;3.;$151,000;4.;$232,0004. (TCO A) In;industries with high rates of return (such as a magazine distribution company);an alternative method of revenue recognition would be;?;record sales net of an estimate of expected future returns;?;record sales in current period and returns in future periods as they occur;? do not record any sales until;expiration of all return privileges have passed;?;all of the above


Paper#45295 | Written in 18-Jul-2015

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