In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

rev: 09_15_2017_QC_CS-99734

Required:

1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)

3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract. (Do not round intermediate calculations.)

Problem B Deere & Company manufactures, distributes, and finances a full range of agricultural equipment; a broad range of industrial equipment for construction, forestry, and public works; and a variety of lawn and grounds care equipment. The company also provides credit, health care, and insurance products for businesses and the general public. Consider the following information from the Deere & Company Annual Report:

1. Prepare a statement showing the trend percentages for each item using Year 1 as the base year.
2. Use Years 3 (Base Year) and 4 and prepare horizontal analysis showing both dollar change and percentage change.
3. Use Years 3 and 4 and prepare common size income statements (also known as vertical analysis) for both years.

Required information

[The following information applies to the questions displayed below.]

In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)

Required information

[The following information applies to the questions displayed below.]

In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)

1. Given a strip commercial development near Columbia, SC, with the following characteristics: overland flow length = 180 ft on 2.1% grade over asphalt cover (n=0.011); shallow concentrated flow length of 1000 ft on 1.8% grade (paved gutter); drainage area = 5 acres; runoff coefficient = 0.60

1. Sheet flow travel time (minutes) =                           
2. Shallow concentrated flow travel time (minutes) =                              
3. Watershed time of concentration (minutes) =                         
4. 10-year design rainfall intensity (inches/hour) =                                 
5. Runoff peak (cfs) for 10-year design rainfall =                                   

2. Given a 28-acre watershed with the following land use mix: 8 acres of SFR (38% impervious) on HSG-B soils, 5 acres of SFR (30% impervious) on HSG-C soils, and 15 acres of open space (park and playground) in fair condition on HSG-C soils. Watershed time of concentration is 21 minutes. The design return period 24-hour rainfall depth is 5.25 inches.

1. The runoff-weighted average curve number (CN) =                             
2. The area-weighted unit hydrograph peak rate factor (PRF) =                                                                 

c)    The runoff volume from a rainfall of 3.25 inches (watershed inches) =                             

d)   The runoff volume from a rainfall of 0.47 inches (watershed inches) =                             

A builder started to construct an apartment by spending $1Million initially and in addition, paid $50K for county approval. The construction was canceled due to regulatory issues. What is the Cost of imperfect contract? and  State the factors that caused the issue of imperfect contract?

Thanks.

Parnell Company acquired construction equipment on January 1, 2017, at a cost of $75,200. The equipment was expected to have a useful life of five years and a residual value of $11,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $70,600, a salvage value of $11,000, and a remaining useful life of four years. In measuring property, plant, and equipment subsequent to acquisition under IFRS, Parnell would opt to use the revaluation model in IAS 16.

Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required:

1. Prepare journal entries for this equipment for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.

2. Prepare the entry(ies) that Parnell would make on the December 31, 2018 conversion worksheet to convert U.S. GAAP balances to IFRS.

Parnell Company acquired construction equipment on January 1, 2017, at a cost of $76,000. The equipment was expected to have a useful life of six years and a residual value of $10,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $70,200, a salvage value of $10,000, and a remaining useful life of five years. In measuring property, plant, and equipment subsequent to acquisition under IFRS, Parnell would opt to use the revaluation model in IAS 16.

Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required:

Prepare journal entries for this equipment for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.

1. Record the entry for depreciation expense as per U.S. GAAP.

2. Record the entry for depreciation expense as per IFRS.

3. Record the entry of the revaluation of equipment as per U.S. GAAP.

4. Record the entry of the revaluation of equipment as per IFRS.

5. Record the entry for depreciation expense as per U.S. GAAP.

6. Record the entry for depreciation expense as per IFRS.

Prepare the entry(ies) that Parnell would make on the December 31, 2018 conversion worksheet to convert U.S. GAAP balances to IFRS.

1. Record the entry for recording profit on revaluation of equipment due to conversion from U.S. GAAP to IFRS.

2. Record the entry for additional depreciation expense on revaluation of equipment due to conversion from U.S. GAAP to IFRS.

Beta Inc. wants to construct a manufacturing plant in Brazil. The construction will cost 900 million Brazilian Real. Beta intends to operate the plant for 3 years. During the 3 years of operation, Real (BRL) cash flows are expected to be 300 million BRL, 300 million BRL, and 200 million BRL, respectively.

Operating cash flows will begin 1 year from today and are remitted back to the Canadian parent at the end of each year. At the end of the third year, beta expects to sell the plant for 500 million BRL.

Beta has a required rate of return of 17%. It currently takes 2.8743 BRL to buy 1 Canadian dollar, and the BRL is expected to depreciate by 5 percent per year.

A. Determine NPV of the project. Should Beta build the plant?

B. If the required rate of return is 12%, revised salvage value is 650 million BRL and BRL depreciates by 7.5% every year, what will be the new NPV?

ANSWER

A.

DECISION

ACCEPT / REJECT = ?

B.

DECISION - ACCEPT/REJECT

=