On June 15, 2021, Sanderson Construction entered into a
long-term construction contract to build a baseball stadium in
Washington, D.C., for $220 million. The expected completion date is
April 1, 2023, just in time for the 2023 baseball season. Costs
incurred and estimated costs to complete at year-end for the life
of the contract are as follows ($ in millions):
| 2021 | 2022 | 2023 | |||||||
| Costs incurred during the year | $ | 40 | $ | 80 | $ | 50 | |||
| Estimated costs to complete as of December 31 | 120 | 60 | — | ||||||
Required:
1. Compute the revenue and gross profit will
Sanderson report in its 2021, 2022, and 2023 income statements
related to this contract assuming Sanderson recognizes revenue over
time according to percentage of completion.
2. Compute the revenue and gross profit will
Sanderson report in its 2021, 2022, and 2023 income statements
related to this contract assuming this project does not qualify for
revenue recognition over time.
3. Suppose the estimated costs to complete at the
end of 2022 are $80 million instead of $60 million. Compute the
amount of revenue and gross profit or loss to be recognized in 2022
assuming Sanderson recognizes revenue over time according to
percentage of completion.
In: Accounting
Assume Nortel Networks contracted to provide a customer with
Internet infrastructure for $2,000,000. The project began in 2021
and was completed in 2022. Data relating to the contract are
summarized below:
| 2021 | 2022 | |||||
| Costs incurred during the year | $ | 300,000 | $ | 1,575,000 | ||
| Estimated costs to complete as of 12/31 | 1,200,000 | 0 | ||||
| Billings during the year | 380,000 | 1,620,000 | ||||
| Cash collections during the year | 250,000 | 1,750,000 | ||||
Required:
1. Compute the amount of revenue and gross profit
or loss to be recognized in 2021 and 2022 assuming Nortel
recognizes revenue over time according to percentage of
completion.
2. Compute the amount of revenue and gross profit
or loss to be recognized in 2021 and 2022 assuming this project
does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2021 assuming Nortel recognizes revenue over time according to
percentage of completion.
4. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2021 assuming this project does not qualify for revenue
recognition over time.
In: Accounting
On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $340 million. The expected completion date is April 1, 2023, just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2021 2022 2023 Costs incurred during the year $ 40 $ 120 $ 50 Estimated costs to complete as of December 31 160 90 — Required: 1. Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. 2. Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to this contract assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2022 are $160 million instead of $90 million. Compute the amount of revenue and gross profit or loss to be recognized in 2022 assuming Sanderson recognizes revenue over time according to percentage of completion.
In: Accounting
Prepare adjusting entries for the following transactions.
Choose from the following accounts: Interest Expense, Insurance Expense, Legal Expense, Salary Expense, Tax Expense, Interest Revenue, Insurance Revenue, Legal Revenue, Salary Revenue, Tax Revenue, and Prepaid Expense, Unearned Revenue, Interest Receivable, Insurance Receivable, Tax Payable
Do NOT enter dollar signs or commas when entering the dollar amounts
1. Unrecorded interest accrued on savings bonds is $410.
Debit Account
Amount
Credit Account
Amount
2. Property taxes incurred but not paid or recorded amount to $800.
Debit Account
Amount
Credit Account
Amount
3. Legal service revenues of $4,000 were collected in advance. By year end $900 was still unearned.
Debit Account
Amount
Credit Account
Amount
4. Prepaid insurance had a $500 debit balance prior to adjustment. By year end, 60 percent was still unexpired.
Debit Account
Amount
Credit Account
Amount
5. Salaries incurred by year end but not yet paid or recorded amounted to $650.
Debit Account
Amount
Credit Account
Amount
In: Accounting
Analyze the Sales Budget your team has created. Based on the projected revenue numbers within the quarterly data given, determine approximately how many new airplanes will be needed to generate the necessary revenue on an annualized basis. The industry uses Passenger Seat Miles as a measure of revenue. Current data fm the industry shows revenue per Passenger Seat Mile is 16 cents. ExpressJet believes that their revenue will go up by one cent per month during the quarter. An average plane flies 52,500,000 miles a year and will last 30 years. Complete a 2 to 3 page memo to the management of ExpressJet explaining your analysis of their asset needs.
| ExpressJet Sales Budget | |||||||
| SALES BUDGET: | |||||||
| October | November | December | Quarter | ||||
| Miles flown by fleet | 218,750,000 | 218,750,000 | 218,750,000 | 656,250,000 | |||
| Revenue per seat mile | $0.16 | $0.17 | $0.18 | $0.17 | |||
| Total sales | $35,000,000 | $37,187,500 | $39,375,000 | $111,562,500 | |||
| Total Miles per quarter | 656,250,000 | ||||||
| Average miles per quarter | 13,125,000 | Average useage per year | 52,500,000 | ||||
| TOTAL PLANES NEEDED | 50 | Average useage per month | 4,375,000 | ||||
In: Accounting
Assume Nortel Networks contracted to provide a customer with
Internet infrastructure for $2,300,000. The project began in 2018
and was completed in 2019. Data relating to the contract are
summarized below:
| 2018 | 2019 | |||||
| Costs incurred during the year | $ | 324,000 | $ | 1,800,000 | ||
| Estimated costs to complete as of 12/31 | 1,296,000 | 0 | ||||
| Billings during the year | 410,000 | 1,680,000 | ||||
| Cash collections during the year | 262,000 | 1,780,000 | ||||
Required:
1. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming Nortel
recognizes revenue over time according to percentage of
completion.
2. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming this project
does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming Nortel recognizes revenue over time according to
percentage of completion.
4. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming this project does not qualify for revenue
recognition over time.
In: Accounting
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,050,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022 Costs incurred during the year $ 304,000 $ 1,595,000 Estimated costs to complete as of 12/31 1,216,000 0 Billings during the year 385,000 1,630,000 Cash collections during the year 260,000 1,755,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.
In: Accounting
The Brew House needs to decide which of two coffee maker designs is better environmentally. Using the following tables, determine which model is the better design alternative.
|
Brew Master |
||||
|
Part |
Resale Revenue per Unit |
Recycling Revenue per Unit |
Processing Cost per Unit |
Disposal Cost per Unit |
|
Metal frame |
$1.601.60 |
$2.862.86 |
$1.231.23 |
$0.730.73 |
|
Timer |
0.550.55 |
0.500.50 |
1.551.55 |
1.461.46 |
|
Plug / cord |
4.234.23 |
5.675.67 |
6.256.25 |
0.250.25 |
|
Coffee pot |
2.452.45 |
2.552.55 |
2.152.15 |
1.381.38 |
|
Brew Mini |
||||
|
Part |
Resale Revenue per Unit |
Recycling Revenue per Unit |
Processing Cost per Unit |
Disposal Cost per Unit |
|
Plastic frame |
$1.401.40 |
$3.293.29 |
$0.850.85 |
$0.900.90 |
|
Plug / cord |
3.903.90 |
4.404.40 |
5.215.21 |
0.000.00 |
|
Coffee pot |
2.272.27 |
2.872.87 |
2.152.15 |
1.281.28 |
Revenue retrieval for Brew
Masterequals= $nothing
(round your response to two decimal places).Revenue retrieval for Brew
Miniequals= $nothing
(round your response to two decimal places).The best design alternative is
▼
Brew Mini
Brew Master
.
In: Accounting
Assume Nortel Networks contracted to provide a customer with
Internet infrastructure for $2,100,000. The project began in 2018
and was completed in 2019. Data relating to the contract are
summarized below:
| 2018 | 2019 | |||||
| Costs incurred during the year | $ | 308,000 | $ | 1,615,000 | ||
| Estimated costs to complete as of 12/31 | 1,232,000 | 0 | ||||
| Billings during the year | 390,000 | 1,640,000 | ||||
| Cash collections during the year | 254,000 | 1,760,000 | ||||
Required:
1. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming Nortel
recognizes revenue over time according to percentage of
completion.
2. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming this project
does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming Nortel recognizes revenue over time according to
percentage of completion.
4. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming this project does not qualify for revenue
recognition over time.
In: Accounting
Assume Nortel Networks contracted to provide a customer with
Internet infrastructure for $2,100,000. The project began in 2021
and was completed in 2022. Data relating to the contract are
summarized below:
| 2021 | 2022 | |||||
| Costs incurred during the year | $ | 308,000 | $ | 1,615,000 | ||
| Estimated costs to complete as of 12/31 | 1,232,000 | 0 | ||||
| Billings during the year | 390,000 | 1,640,000 | ||||
| Cash collections during the year | 270,000 | 1,760,000 | ||||
Required:
1. Compute the amount of revenue and gross profit or loss to be
recognized in 2021 and 2022 assuming Nortel recognizes revenue over
time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be
recognized in 2021 and 2022 assuming this project does not qualify
for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information
related to this contract would be presented at the end of 2021
assuming Nortel recognizes revenue over time according to
percentage of completion.
4. Prepare a partial balance sheet to show how the information
related to this contract would be presented at the end of 2021
assuming this project does not qualify for revenue recognition over
time.
In: Accounting