PRACTICAL QUESTION
Tiger Construction Ltd signs a contract on 1 May 2018 to build a theme park. The construction is scheduled to commence on 1 July 2018 and the estimated date of completion is 30 June 2021. The total contract price is $5m and the cost of the park is initially estimated at $4.5m. The following data relates to the construction period:
|
For the year ended 30 June |
|||
|
2019 |
2020 |
2021 |
|
|
$ |
$ |
$ |
|
|
Costs to date |
1,700,000 |
3,000,000 |
4,800,000 |
|
Estimated costs to complete |
2,800,000 |
1,700,000 |
- |
|
Progress billings to date |
1,400,000 |
2,600,000 |
5,000,000 |
|
Cash received to date |
1,200,000 |
2,200,000 |
5,000,000 |
Assume that cost (an input measure) is used as the basis for assessing progress on the construction contract.
Required
Determine the percentage of completion for 2019, 2020 and 2021.
|
2019 |
2020 |
2021 |
|
|
$ |
$ |
$ |
|
|
Costs to date (A) |
|||
|
Estimated costs to complete (B) |
|||
|
Estimated total cost (A+B=C) |
|||
|
Percent of completion (POC=A/C) |
Calculate revenue and gross profit for 2019, 2020 and 2021.
|
2019 |
2020 |
2021 |
|||||
|
$ |
$ |
$ |
|||||
|
Contract Price |
|||||||
|
Contact Price x POC |
|||||||
|
LessRevenue recognised in previous years |
|||||||
|
= Revenue recognised for the year |
|||||||
|
Less Costs for the year |
|||||||
|
= Gross profit for the year |
|||||||
Using the percentage of completion method, provide the journal entries for 2019, 2020 and 2021.
|
2019 $m |
2020 $m |
2021 $m |
|||
|
(i) |
To record costs incurred: |
||||
|
(ii) |
To record billings to customers: |
||||
|
(iii) |
To record cash collections: |
||||
|
(iv) |
To record periodic income recognised: |
||||
In: Accounting
PRACTICAL QUESTION
Tiger Construction Ltd signs a contract on 1 May 2018 to build a theme park. The construction is scheduled to commence on 1 July 2018 and the estimated date of completion is 30 June 2021. The total contract price is $5m and the cost of the park is initially estimated at $4.5m. The following data relates to the construction period:
|
For the year ended 30 June |
|||
|
2019 |
2020 |
2021 |
|
|
$ |
$ |
$ |
|
|
Costs to date |
1,700,000 |
3,000,000 |
4,800,000 |
|
Estimated costs to complete |
2,800,000 |
1,700,000 |
- |
|
Progress billings to date |
1,400,000 |
2,600,000 |
5,000,000 |
|
Cash received to date |
1,200,000 |
2,200,000 |
5,000,000 |
Assume that cost (an input measure) is used as the basis for assessing progress on the construction contract.
Required
Determine the percentage of completion for 2019, 2020 and 2021.
|
2019 |
2020 |
2021 |
|
|
$ |
$ |
$ |
|
|
Costs to date (A) |
|||
|
Estimated costs to complete (B) |
|||
|
Estimated total cost (A+B=C) |
|||
|
Percent of completion (POC=A/C) |
Calculate revenue and gross profit for 2019, 2020 and 2021.
|
2019 |
2020 |
2021 |
|||||
|
$ |
$ |
$ |
|||||
|
Contract Price |
|||||||
|
Contact Price x POC |
|||||||
|
LessRevenue recognised in previous years |
|||||||
|
= Revenue recognised for the year |
|||||||
|
Less Costs for the year |
|||||||
|
= Gross profit for the year |
|||||||
Using the percentage of completion method, provide the journal entries for 2019, 2020 and 2021.
|
2019 $m |
2020 $m |
2021 $m |
|||
|
(i) |
To record costs incurred: |
||||
|
(ii) |
To record billings to customers: |
||||
|
(iii) |
To record cash collections: |
||||
|
(iv) |
To record periodic income recognised: |
||||
In: Accounting
P5–5A Buono Adventures, which uses the perpetual inventory system, has the following account balances (in alphabetical order) on July 31, 2020:
Accounts Payable.......................................................................$ 21,600Accounts Receivable..................................................................23,200Accumulated Amortization—Equipment..............................64,600Cash..............................................................................................8,400Cost of Goods Sold.....................................................................687,000E. Buono, Capital........................................................................402,000E. Buono, Withdrawals..............................................................92,000Equipment..............................180,000Interest Earned..........................................................................4,000Inventory....................................................................................143,000Operating Expenses..................................................................355,000Sales Discounts..........................................................................10,300Sales Returns and Allowances................................................32,900Sales Revenue............................................................................1,045,200Supplies......................................................................................14,600Unearned Sales Revenue..........................................................9,000
NOTE: For simplicity, all operating expenses have been summarized in the account Operating Expenses.
Additional data at July 31, 2020:
A physical count of items showed $3,000 of supplies on
hand. (Hint: Use the account Operating Expenses in the adjusting
journal entry.)
An inventory count showed inventory on hand at July
31, 2020, of $140,000.
The equipment has an estimated useful life of eight
years and is expected to have no scrap or residual value at the end
of its life. (Hint: Use the account Operating Expenses in the
adjusting journal entry.)
Unearned sales revenue of $5,600 was earned by July
31, 2020.
Required
Record all adjustments and closing entries that would
be required on July 31, 2020.
Prepare the multi-step income statement and statement
of owner’s equity for the year ended July 31, 2020, and the
classified balance sheet in report format as at July 31,
2020.
In: Accounting
The following information was obtained from the accounting records and financial statements of Fairbanks Inc.
|
Assets |
2019 |
2020 |
∆ |
|
Cash |
$ 662,000 |
781,000 |
119,000 |
|
Accounts receivable |
524,000 |
707,000 |
183,000 |
|
Raw materials inventory |
404,000 |
521,000 |
117,000 |
|
Finished goods inventory |
1,212,000 |
1,190,000 |
(22,000) |
|
Land |
1,200,000 |
1,000,000 |
(200,000) |
|
Machinery and equipment |
3,330,000 |
3,511,000 |
181,000 |
|
Accumulated depreciation |
(1,555,000) |
(1,725,000) |
(170,000) |
|
Net capital assets |
1,775,000 |
1,786,000 |
11,000 |
|
Total |
5,777,000 |
5,985,000 |
|
|
Liabilities and Stockholders’ equity |
|||
|
Accounts payable |
888,000 |
961,000 |
73,000 |
|
Wages payable |
122,000 |
107,000 |
(15,000) |
|
Long-term debt |
2,900,000 |
2,970,000 |
70,000 |
|
Common shares |
940,000 |
1,000,000 |
60,000 |
|
Retained earnings |
927,000 |
947,000 |
20,000 |
|
Total |
5,777,000 |
5,985,000 |
Additional information:
Required:
In: Accounting
Required: Complete the following worksheet for Appliance Repair for the year ended 30 June 2020.
Additional information to complete the worksheet:
Appliance Repair Worksheet For the year ended 30 June 2020 |
||||||||||
|
Trial Balance (Unadjusted) |
Adjustments |
Trial Balance (Adjusted) |
Income Statement |
Balance Sheet |
||||||
|
Account title |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
|
Cash at bank |
37,500 |
|||||||||
|
Accounts receivable |
127,500 |
|||||||||
|
Prepaid insurance |
1,800 |
|||||||||
|
Supplies |
900 |
|||||||||
|
Equipment |
67,500 |
|||||||||
|
Accumulated depreciation-Equipment |
||||||||||
|
Accounts payable |
2,700 |
|||||||||
|
Unearned revenue |
3,150 |
|||||||||
|
Interest payable |
||||||||||
|
Bank loan (due in 2028) |
75,000 |
|||||||||
|
Capital |
49,950 |
|||||||||
|
Service revenue |
157,500 |
|||||||||
|
Wages expense |
52,500 |
|||||||||
|
Supplies expense |
600 |
|||||||||
|
Depreciation expense – Equipment |
||||||||||
|
Insurance expense |
||||||||||
|
Interest expense |
||||||||||
|
288,300 |
288,300 |
|||||||||
In: Accounting
Alexa Inc. purchased equipment in 2018 for $70,000 with no residual value. On December 31, 2020, accumulated depreciation using the straight-line method for financial reporting was $21,000. For tax purposes, Alexa uses MACRS depreciation resulting in $49,840 in accumulated depreciation for tax purposes on December 31, 2020. Taxable income was $140,000 for 2020 and the company's tax rate is 25%.
a. Determine the GAAP basis of equipment (net) on December 30, 2020.
| Equipment, net (GAAP basis) | Answer |
b. Determine the tax basis of equipment on December 30, 2020.
| Equipment, net (tax basis) | Answer |
c. Assuming a deferred tax liability balance of $6,860 on December 31, 2019, record income tax expense for 2020.
Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.
| Date | Account Name | Dr. | Cr. |
|---|---|---|---|
| Dec. 31, 2020 | AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer | |
| AnswerDeferred Tax AssetValuation Allowance for Deferred Tax AssetIncome Tax PayableLiability for Unrecognized Tax BenefitsDeferred Tax LiabilityIncome Tax ExpenseN/A | Answer | Answer |
In: Accounting
The Affordable Care Act (ACA) has three primary goals: expand access to health insurance, protect patients against arbitrary actions by insurance companies, and reduce costs. Did the 2010 Act achieve these goals? How has the ACA impacted the overall compensation of today’s workers? Please support your response through examples
In: Operations Management
In December 2010, Alpha Technologies Plc. issued coupon bonds with par value £100. The coupon rate is 8 percent annually and the bonds will be redeemed at par value in December 2015. What is the price of the bond if the competitive market interest rate is 10 percent? How would your answer change if the coupons were paid semi-annually?
In: Finance
Choose a recommendation from the IOM report (provided link). Research the issue and formulate a plan, then provide at least two strategies to achieve the recommendation. Discuss the two strategies as to how you believe they would achieve the results.
http://www.nationalacademies.org/hmd/~/media/Files/Report%20Files/2010/The-Future-of-Nursing/Future%20of%20Nursing%202010%20Recommendations.pdf
In: Nursing
Construct the flow diagram and estimate the total heat required to convert 550 g ice at –75o C to steam at 1850 C.
(Cice = 2090 J/kg.°C, Cwater = 4186 J/kg.°C, Csteam = 2010 J/kg.°C, Lf = 3.33 × 105 J/kg, Lv = 2.26 × 106 J/kg.)
In: Physics