Kim Hotels is interested in developing a new hotel in Seoul. The company estimates that the hotel would require an initial investment of $20 million. Kim expects that the hotel will produce positive cash flows of $3 million a year at the end of each of the next 20 years. The project's cost of capital is 13%. While Kim expects the cash flows to be $3 million a year, it recognizes that the cash flows could, in fact, be much higher or lower, depending on whether the Korean government imposes a large hotel tax. One year from now, Kim will know whether the tax will be imposed. There is a 50% chance that the tax will be imposed, in which case the yearly cash flows will be only $2.2 million. At the same time, there is a 50% chance that the tax will not be imposed, in which case the yearly cash flows will be $3.8 million. Kim is deciding whether to proceed with the hotel today or to wait 1 year to find out whether the tax will be imposed. If Kim waits a year, the initial investment will remain at $20 million. Assume that all cash flows are discounted at 13%. Use the Black-Scholes model to estimate the value of the option. Assume the variance of the project's rate of return is 7.32% and the risk-free rate is 6%. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to two decimal places.
In: Finance
Long-term Contracts
Koolman Construction Company began work on a contract in 2017. The contract price is $3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows:
| 2017 | 2018 | |
| Costs incurred during the year | $ 600,000 | $ 700,000 |
| Estimated costs to complete, December 31 | $1,400,000 | $1,200,000 |
| Billings during the year | $500,000 | $850,000 |
| Collections during the year | $400,000 | $800,000 |
Required:
1. Compute the gross profit or loss recognized in 2017 and 2018.
| KOOLMAN CONSTRUCTION COMPANY | ||
| Gross Profit / Loss | ||
| 2017 and 2018 | ||
| 2017 | 2018 | |
| Construction costs incurred to date | $ | $ |
| Estimated costs to complete | $ | $ |
| Total estimated costs | $ | $ |
| Percentage completed | % | % |
| Revenue to date | $ | $ |
| Revenue recognized in current year | $ | $ |
| Costs incurred in current year | ||
| Profit (loss) recognized | $ | $ |
2. Prepare the appropriate sections of the income statement for each year.
| KOOLMAN CONSTRUCTION COMPANY | ||
| Partial Income Statement | ||
| For the Years Ended December 31, 2017 and 2018 | ||
| 2017 | 2018 | |
| Construction revenue | $ | $ |
| Construction expense | ||
| Gross profit (loss) | $ | $ |
Prepare the appropriate sections of the ending balance sheet for the year 2017.
| KOOLMAN CONSTRUCTION COMPANY | ||
| Partial Balance Sheet | ||
| December 31, 2017 | ||
| Current Assets: | ||
| Accounts receivable | $ | |
| Inventory: | ||
| Construction in progress | $ | |
| Less: Partial billings | ||
| Costs and recognized profit not yet billed | ||
Prepare the appropriate sections of the ending balance sheet for 2018.
| KOOLMAN CONSTRUCTION COMPANY | ||
| Partial Balance Sheet | ||
| December 31, 2018 | ||
| Current Assets: | ||
| Accounts receivable | $ | |
| Inventory: | ||
| Construction in progress | $ | |
| Less: Partial billings | ||
| Costs and recognized profit not yet billed | ||
In: Accounting
Long-term Contracts
Koolman Construction Company began work on a contract in 2017. The contract price is $3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows:
2017 2018
Costs incurred during the year $ 600,000 $ 700,000
Estimated costs to complete, December 31 $1,400,000
$1,200,000
Billings during the year $500,000 $850,000
Collections during the year $400,000 $800,000
Required:
1. Compute the gross profit or loss recognized in 2017 and 2018.
KOOLMAN CONSTRUCTION COMPANY
Gross Profit / Loss
2017 and 2018
2017
2018
Construction costs incurred to date $_______ $ _______
Estimated costs to complete $ ________ $ ________
Total estimated costs $ _________ $ __________
Percentage completed %_________ %________
Revenue to date $_________ $ __________
Revenue recognized in current year $_______ $ _________
Costs incurred in current year __________
__________
Profit (loss) recognized $________ $ _________
2. Prepare the appropriate sections of the income statement for each year.
KOOLMAN CONSTRUCTION COMPANY
Partial Income Statement
For the Years Ended December 31, 2017 and 2018
2017
2018
Construction revenue $ ________ $_____________
Construction expense __________
____________
Gross profit (loss) $___________
$____________
Prepare the appropriate sections of the ending balance sheet for the year 2017.
KOOLMAN CONSTRUCTION COMPANY
Partial Balance Sheet
December 31, 2017
Current Assets:
Accounts receivable: $__________
Inventory:
Construction in progress $___________
Less: Partial billings $_____________
Costs and recognized profit not yet billed
$__________
Prepare the appropriate sections of the ending balance sheet for 2018.
KOOLMAN CONSTRUCTION COMPANY
Partial Balance Sheet
December 31, 2018
Current Assets:
Accounts receivable: $________________
Inventory:
Construction in progress $____________
Less: Partial billings _________________
Costs and recognized profit not yet billed ______________
In: Accounting
The management Hilton Hotels series has decided to build a hotel in Cairo by the Nile River. The management has finished all construction procedures and set up all the interior furniture that were bought locally from the local suppliers. The rest of the finishing items were decided to be imported from foreign suppliers. The hotel management has instructed you on 01.04.2020 to be responsible for the transport of the imported items and set them up inside indicated areas in the Hotel before opining date on 01.05.2020.
The details of the cities of suppliers and the type of commodities to be transported EXW are as follow:
P.S. (All Dimensions with meter as measure unit)
2.00 L*1.00 W*1.00 H Jeddah + 2 days from Riyadh to Jeddah by inland
Transport – Full overland freight from Riyadh to Cairo / 3 days.
200 cartons. Dim 1.00 H* 0.5 W* 0.5 H
Wares and China
Wares. Transit Times: Air / 2 days – Sea / 6-8 days
100 Cartons Dim: 0.50L*0.50W*0.50H
10 Boxes, 100 liters 0.50L*0.50W*0.50H
Batteries (DGR) Transit Times: Air / 3 days – Sea / 11-13 days
***** Please decide and indicate:
**** Note that:
In: Operations Management
During 2020, Tamarisk Company started a construction job with a
contract price of $1,620,000. The job was completed in 2022. The
following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$373,700 | $749,360 | $1,070,000 | |||
|
Estimated costs to complete |
636,300 | 352,640 | –0– | |||
|
Billings to date |
302,000 | 907,000 | 1,620,000 | |||
|
Collections to date |
268,000 | 815,000 | 1,425,000 |
Compute the amount of gross profit to be recognized each year,
assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
225,700 |
|
|---|---|---|
|
Gross profit recognized in 2021 |
126,540 |
|
|
Gross profit recognized in 2022 |
197,760 |
Prepare all necessary journal entries for 2021.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts. For costs incurred use account Materials, Cash,
Payables.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
(To record cost of construction.) |
||
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
(To record progress billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
In: Accounting
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:
|
2018 |
2019 |
2020 |
|||||||
|
Cost incurred during the year |
$ |
2,580,000 |
$ |
4,042,000 |
$ |
2,175,800 |
|||
|
Estimated costs to complete as of year-end |
6,020,000 |
1,978,000 |
0 |
||||||
|
Billings during the year |
2,060,000 |
4,562,000 |
3,378,000 |
||||||
|
Cash collections during the year |
1,830,000 |
4,200,000 |
3,970,000 |
||||||
Westgate recognizes revenue over time according to percentage of
completion.
Required:
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.
|
2018 |
2019 |
2020 |
|||||||
|
Cost incurred during the year |
$ |
2,580,000 |
$ |
3,830,000 |
$ |
3,990,000 |
|||
|
Estimated costs to complete as of year-end |
6,020,000 |
4,160,000 |
0 |
||||||
In: Accounting
please write the code in C format avoid using (<<count>>)
Assume that you work for a travel agency. Write a C program that
performs 7 different tasks described below
for this company. The flights have the following
daily departure and arrival times:
| hotel name | cost | ride cost | |
| Rose | 248$ | 0$ | |
| Poprock | 90$ | 25$ | |
| flower | 128$ | 20$ |
| departure time | arrival time | cost |
| 7:15 am | 8:25am | 231$ |
| 8:15 am | 9:25am | 226$ |
| 9:15am | 10:25am | 226$ |
| 10:15am | 11:25am | 283$ |
| 11:15am | 12:25pm | 283$ |
| 3:15pm | 4:25pm | 226$ |
| 4:15pm | 5:25pm | 226$ |
| 5:15pm | 6:25pm | 401$ |
a) Based on the time entered by the customer, the closest departure time is displayed using 12- hour format.
b)the customer is asked if they would like a hotel and for how many days. hotel cost is mentioned above. Calculate the total cost (before taxes) and display it (flight + hotel for n number of days +ride).
c) now there is 2 types of discount:
Discount1: If the total fee is a multiple of 11,
then the
customer gets a 6% discount.
Discount2: An additional discount of 7% is given
to those customers whose subtotal
after discount1 is a multiple of the sum of digits of the
customer’s day of birth.
Three examples are given below for your convenience. See Sample
Input / output
for more clarification.
• Ex1: If the day of birth entered is 3, the customer will get an
additional 7%
discount if the sub-total of their purchase after discount1 is a
multiple of 3.
• Ex 2: If the day of birth entered is 12, the customer will get an
additional 7%
discount if their purchase after discount1 is a multiple of 3
(since sum of digits of
day of birth (12) is 3).
c)13% tax is applied to the total cost and the final bill is?
In: Computer Science
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$4,540,000. Curtiss concludes that the contract does not qualify
for revenue recognition over time. The building was completed on
December 31, 2020. Estimated percentage of completion, accumulated
contract costs incurred, estimated costs to complete the contract,
and accumulated billings to Axelrod under the contract were as
follows:
At 12-31-2018
At 12-31-2019
At 12-31-2020
Percentage of completion
10
%
60
%
100
%
Costs incurred to date
$
368,000
$
2,898,000
$
4,889,000
Estimated costs to complete
3,312,000
1,932,000
0
Billings to Axelrod, to date
729,000
2,350,000
4,540,000
Required:
1. Compute gross profit or loss to be recognized as a result of
this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time according to
percentage of completion, compute gross profit or loss to be
recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time according to
percentage of completion, compute the amount to be shown in the
balance sheet at the end of 2018 and 2019 as either cost in excess
of billings or billings in excess of costs.
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.)
Show less
Year
Req 1 Gross Profit (Loss) Recognized ("Upon Completion")
Req 2 Gross Profit (Loss) Recognized ("Over Time")
2018
$0
$86,000
2019
$(290,000)
$(376,000)
2020
$(59,000)
$(86,000)
Total project profit (loss)
$(349,000)
$(376,000)
Req 3
2.Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2018 and 2019 as either cost in excess of billings or billings in excess of costs.
Balance Sheet (Partial)
2018
2019
Current assets:
Costs less loss in excess of billings
Current liabilities:
Billings in excess of costs and profit
$275,000
Please calculate Costs less loss in excess of billings in 2019.
In: Accounting
Given the following table of grades:
|
Grades |
A |
B |
C |
D |
F |
Totals |
|
Males |
17 |
8 |
14 |
11 |
3 |
53 |
|
Females |
12 |
11 |
13 |
6 |
5 |
47 |
|
Totals |
29 |
19 |
27 |
17 |
8 |
100 |
a. What is the probability that a randomly selected student got an A or B?
b. What is the probability that if a student was female that they got a passing grade?
c. What is the probability of a female student given that they got a “B”?
4. The Edward’s Theater chain has studied its movie customers to determine how much money they spend on concessions. The study revealed that the spending distribution is approximately normally distributed with a mean of $4.11 and a standard deviation of $1.37. What percentage of customers will spend less than $3.00 on concessions? Use the Z-tables in the textbook.
In: Statistics and Probability
Use the following information to answer MCQ21 to MCQ23
On January 1st, 2018, Crane Construction Corporation signed a contract to construct a building with a contract price of $18,000,000. The company expects to get this contract completed by 2020. Crane uses the percentage of completion method Information relating to the costs, billings, and collections for this contract is as follows:
2018 2019 2020
Total costs incurred to date $4,500,000 $7,920,000 $13,800,000
Estimated costs to complete 7,500,000 5,280,000 -0-
Customer billings to date 6,600,000 12,000,000 16,800,000
Collections to date 6,000,000 10,500,000 16,500,000
What is the percentage of completion for the year 2019?
Select one:
a. 0.26
b. 0.375
c. 0.66
d. 0.60
What is the gross profit that Crane Cor to recognize in 2020?
Select one:
a. $4,200,000
b. $2,250,000
c. $6,000,000
d. $1,320,000
How much the cost incurred in the year 2019 only:
Select one:
a. $7,920,000
b. $13,200,000
c. $3,420,000
d. $5,280,000
In: Accounting