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1. (TCO A) Platypus Building Inc. won a bid for a...

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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 $2100000. 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. $300,000 3. (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. $232,000 4. (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#6789 | Written in 18-Jul-2015

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