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Rabu, 01 Februari 2017

Terbaru 2020 - EXERCISE 18-6 (10-12 minutes)

Februari 01, 2017 / by Indra Rani / in Akuntansi / with No comments /

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BRAD BRIDGEWATER, INC.

Computation of Gross Profit to Be

Recognized on Uncompleted Contract

Year Ended December 31, 2004

_____________________________________________________________

Total contract price

Estimated contract cost at completion $2,000,000

($700,000 + $1,300,000)

Fixed fee 450,000

Total 2,450,000

Total estimated cost 2,000,000

Gross profit 450,000

Percentage of completion ($700,000 ÷ $2,000,000) 35%

Gross profit to be recognized ($450,000 X 35%) $ 157,500

:.0001pt;tab-stops:30.0pt right 492.0pt 497.0pt'>(The initial estimated total gross profit before tax on the contract.)

le='tab-stops:30.0pt 60.0pt right dotted 318.0pt blank 405.0pt 504.0pt'> Sales Revenue—Texts*................................. 80,000

Allowance for Returns................................... 1,920,000

Accounts Receivable..................................... 16,000,000

*A debit to either Sales Revenue—Texts or Sales Returns could be made here.

Terbaru 2020 - EXERCISE 18-5 (10-15 minutes)

Februari 01, 2017 / by Indra Rani / in Akuntansi / with No comments /

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(a) Contract billings to date $61,500

Less accounts receivable 12/31/04 21,500

Portion of contract billings collected $40,000

(b)	$18,200	= 28%
	$65,000

(The ratio of gross profit to revenue recognized in 2004.)

$1,000,000 X .28 = $280,000

(The initial estimated total gross profit before tax on the contract.)

le='tab-stops:30.0pt 60.0pt right dotted 318.0pt blank 405.0pt 504.0pt'> Sales Revenue—Texts*................................. 80,000

Allowance for Returns................................... 1,920,000

Accounts Receivable..................................... 16,000,000

*A debit to either Sales Revenue—Texts or Sales Returns could be made here.

Terbaru 2020 - EXERCISE 18-4 (Continued)

Februari 01, 2017 / by Indra Rani / in Akuntansi / with No comments /

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(b) Construction in Process....................................... 535,000

($935,000 – $400,000)

Materials, Cash, Payables, etc.................. 535,000

Accounts Receivable ($900,000 – $300,000).... 600,000

Billings and Construction in Process........ 600,000

Cash ($810,000 – $270,000).................................. 540,000

Accounts Receivable..................................... 540,000

Construction Expenses........................................ 535,000

Construction in Process....................................... 140,000

Revenue from Long-term Contracts........... 675,000*

*$1,500,000 X (85% – 40%)

	2004	2005	2006
Gross profit	$ –0–	$ –0–	$430,000*

*$1,500,000 – $1,070,000

Terbaru 2020 - EXERCISE 18-4 (20-25 minutes)

Februari 01, 2017 / by Indra Rani / in Akuntansi / with No comments /

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(a) Gross profit recognized in:

	2004		2005		2006
Contract price		$1,500,000		$1,500,000		$1,500,000
Costs:
Costs to date	$400,000		$935,000		$1,070,000
Estimated costs to complete	600,000	1,000,000	165,000	1,100,000	0	1,070,000
Total estimated profit		500,000		400,000		430,000
Percentage completed to date		40%*		85%**		100%
Total gross profit recognized		200,000		340,000		430,000
Less: Gross profit recognized in previous years		0		200,000		340,000
Gross profit recognized in current year		$ 200,000		$ 140,000		$ 90,000

**$400,000 ÷ $1,000,000

**$935,000 ÷ $1,100,000

Terbaru 2020 - EXERCISE 18-3 (10-15 minutes)

Februari 01, 2017 / by Indra Rani / in Akuntansi / with No comments /

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(a) Cash (2004 slips) (300 X $900).............................. 270,000

Dock Rent Revenue......................................... 270,000

Cash (2005 slips) [200 X $900 X (1.00 – .05)]...... 171,000

Unearned Revenue (current).......................... 171,000

Cash (2006 slips) [60 X $900 X (1.00 – .25)]........ 40,500

Unearned Revenue (non-current)................. 40,500

(b) The marina operator should recognize that advance rentals generated $211,500 ($171,000 + $40,500) of cash in exchange for the marina’s promise to deliver future services. In effect, this has reduced future cash flow by accelerating payments from boat owners. Also, the price of rental services has effectively been reduced. The current cash bonanza does not reflect current earned income. The future costs of operation must be covered, in part, from this accelerated cash inflow. On a present value basis, the granting of these discounts seems ill-advised unless interest rates were to skyrocket so that the interest earned would offset the discounts provided.

ss=BodyLarge style='margin-top:6.0pt;tab-stops:30.0pt 60.0pt right dotted 318.0pt blank 405.0pt 504.0pt'> Cash.................................................................. 14,000,000

Sales Revenue—Texts*................................. 80,000

Allowance for Returns................................... 1,920,000

Accounts Receivable..................................... 16,000,000

*A debit to either Sales Revenue—Texts or Sales Returns could be made here.

Terbaru 2020 - EXERCISE 18-2 (15-20 minutes)

Februari 01, 2017 / by Indra Rani / in Akuntansi / with No comments /

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EXERCISE 18-2 (15-20 minutes)

(a) 1. 6/3 Accounts Receivable—Kim Rhode............. 5,000

Sales.......................................................... 5,000

6/5 Sales Returns and Allowances................. 400

Accounts Receivable—Kim Rhode.. 400

6/7 Transportation-Out....................................... 24

Cash........................................................ 24

6/12 Cash................................................................ 4,508

Sales Discounts (2% X $4,600).................. 92

Accounts Receivable—Kim Rhode.. 4,600

2. 6/3 Accounts Receivable—Kim Rhode.......... 4,900

Sales [$5,000 – (2% X 5,000)]............. 4,900

6/5 Sales Returns and Allowances................. 392

Accounts Receivable—Kim Rhode.. 392

[$400 – (2% x $400)]

6/7 Transportation-Out....................................... 24

Cash........................................................ 24

6/12 Cash................................................................ 4,508

Accounts Receivable—Kim Rhode.......... 4,508

(b) 8/5 Cash................................................................ 4,600

Accounts Receivable—Kim Rhode.. 4,508

Sales Discounts Forfeited.................. 92

(2% X $4,600)

Terbaru 2020 - SOLUTIONS TO EXERCISES

Februari 01, 2017 / by Indra Rani / in Akuntansi / with No comments /

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SOLUTIONS TO EXERCISES

EXERCISE 18-1 (15-20 minutes)

(a) Huish could recognize revenue at the point of sale based upon the time of shipment because the books are sold f.o.b. shipping point. Because of the return policy one might argue in favor of the cash collection basis. Because the returns can be estimated, one could argue for shipping point less estimated returns.

(b) Based on the available information and lack of any information indicating that any of the criteria in FASB Statement No. 48 were not met, the correct treatment is to report revenue at the time of shipment as the gross amount less the 12% normal return factor. This is supported by the legal test of transfer of title and the criteria in FASB No. 48. One could be very conservative and use the 30% maximum return allowance.

Accounts Receivable..................................... 16,000,000

Allowance for Returns................................... 1,920,000

($16,000,000 X 12%)

Sales Revenue—Texts.................................. 14,080,000

(d) October Collection.

Cash.................................................................. 14,000,000

Sales Revenue—Texts*................................. 80,000

Allowance for Returns................................... 1,920,000

Accounts Receivable..................................... 16,000,000

*A debit to either Sales Revenue—Texts or Sales Returns could be made here.