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.

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.

Martinez Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 1997. Prior to 2020, cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2020, is as follows.

On December 31, 2020, the projected benefit obligation and the accumulated benefit obligation were $4,772,000 and $4,033,000, respectively. The fair value of the pension plan assets amounted to $4,129,000 at the end of the year. A 10% settlement rate and a 10% expected asset return rate were used in the actuarial present value computations in the pension plan. The present value of benefits attributed by the pension benefit formula to employee service in 2020 amounted to $199,000. The employer’s contribution to the plan assets amounted to $759,000 in 2020. This problem assumes no payment of pension benefits.

Part 1

Prepare a schedule, based on the average remaining life per employee, showing the prior service cost that would be amortized as a component of pension expense for 2020, 2021, and 2022. (Round answers to 0 decimal places, e.g. 2,525.)

Compute pension expense for the year 2020. (Round answers to 0 decimal places, e.g. 2,525.)

Compute the amount of the 2020 increase/decrease in net gains or losses and the amount to be amortized in 2020 and 2021. (Round answers to 0 decimal places, e.g. 2,525.)

Prepare the journal entries required to report the accounting for the company’s pension plan for 2020. (Round answers to 0 decimal places, e.g. 2,525. 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.)

Ensure that you:

Select and use appropriate verbal and non-verbal communication

Recognise situations where misunderstandings may arise from diversity and form appropriate responses

SCENARIO

Nelson is a young Indigenous worker who feels extremely challenged and anxious when confronted by direct questioning. He has done very well at TAFE, but on attending a job interview the style of questioning made him feel uncomfortable and he found difficulty answering questions about his skills and experience.

It was only the skills of the interviewer that turned the questions around into a more relaxed interchange. This allowed Nelson to express his ideas and demonstrate his skills.

P18.8 (LO 2, 3) (Time Value, Gift Cards, Discounts) Presented below are two independent revenue arrangements for Colbert Company.

Instructions
Respond to the requirements related to each revenue arrangement.

a.    Colbert sells 3D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Colbert sells Lyle Cartright a 3D system, receiving a $5,000 zero-interest-bearing note on January 1, 2020. The cost of the 3D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2020, and compute the total amount of revenue to be recognized in 2020.

b.    Colbert sells 20 nonrefundable $100 gift cards for 3D printer paper on March 1, 2020. The paper has a standalone selling price of $100 (cost $80). The gift cards expiration date is June 30, 2020. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows.

Redemption Total
March 31
50%
April 30
80%
June 30
85%
Prepare the 2020 journal entries related to the gift cards at March 1, March 31, April 30, and June 30.

Flint Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $12 par common stock. At no time has Flint issued any potentially dilutive securities. Listed below is a summary of Flint’s common stock activities. 1. Number of common shares issued and outstanding at December 31, 2018 2,160,000 2. Shares issued as a result of a 12% stock dividend on September 30, 2019 259,200 3. Shares issued for cash on March 31, 2020 2,190,000 Number of common shares issued and outstanding at December 31, 2020 4,609,200 4. A 2-for-1 stock split of Flint’s common stock took place on March 31, 2021.

Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement.

Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement.

Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement.

Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement.

Lester Company processes a raw material called Wizon until the splitoff point were it becomes products X, Y, and Z. Product X is sold at the splitoff point with no further processing. Products Y and Z require further processing to finish them before they can be sold. The following is a summary of costs and other related data for the year ending December 31, 2020.

Joint costs before the splitoff point $240,000

Separable Joint costs after splitoff to complete “Y” $132,000

Separable costs after splitoff to complete “Z” $228,000

product X Y Z

Litres processed 60,000 60,000 120,000

Selling price per litre $1.50 $3.20 $3.15

There were no inventories on hand January 1, 2020, and there was no Wizon on hand on December 31, 2020. All units of X, Y, and Z on hand at year end were complete as to processing.

REQUIRED:

1. Allocate the total joint costs to products X, Y, and Z using the net realizable value method.

2. Calculate the full cost of producing one unit of each of X, Y, and Z

.3. For each product (X, Y, and Z) calculate the dollar value of the cost of goods sold for 2020 and the ending inventory dollar value at December 31, 2020. Assume that 40,000 units of X, 60,000 units of Y, and 90,000 units of Z were sold during 2020.

Exercise 16-15

Nash Inc. uses a calendar year for financial reporting. The company is authorized to issue 8,880,000 shares of $12 par common stock. At no time has Nash issued any potentially dilutive securities. Listed below is a summary of Nash’s common stock activities.

a.) Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement.

b.) Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement.

c.) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement.

d.) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement.

Marin Inc. uses a calendar year for financial reporting. The company is authorized to issue 8,610,000 shares of $10 par common stock. At no time has Marin issued any potentially dilutive securities. Listed below is a summary of Marin’s common stock activities.

Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement.

eTextbook and Media

Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement.

eTextbook and Media

Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement.

eTextbook and Media

Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement.