Beavis Construction Company was the low bidder on a construction
project to build an earthen dam for $1,730,000. The project was
begun in 2020 and completed in 2021. Cost and other data are
presented below:
| 2020 | 2021 | |||||
| Costs incurred during the year | $ | 476,000 | $ | 1,030,000 | ||
| Estimated costs to complete | 884,000 | 0 | ||||
| Billings during the year | 470,000 | 1,260,000 | ||||
| Cash collections during the year | 370,000 | 1,360,000 | ||||
Assume that Beavis recognizes revenue on this contract over time
according to percentage of completion.
Required:
Compute the amount of gross profit recognized during 2020 and
2021.
Beavis Construction Company was the low bidder on a construction
project to build an earthen dam for $1,730,000. The project was
begun in 2020 and completed in 2021. Cost and other data are
presented below:
| 2020 | 2021 | |||||
| Costs incurred during the year | $ | 476,000 | $ | 1,030,000 | ||
| Estimated costs to complete | 884,000 | 0 | ||||
| Billings during the year | 470,000 | 1,260,000 | ||||
| Cash collections during the year | 370,000 | 1,360,000 | ||||
Assume that Beavis recognizes revenue on this contract over time
according to percentage of completion.
Required:
Compute the amount of gross profit recognized during 2020 and
2021.
In: Accounting
On February 1, 2021, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,000,000. During 2021, costs of $2,000,000 were incurred, with
estimated costs of $4,000,000 yet to be incurred. Billings of
$2,500,000 were sent, and cash collected was $2,250,000.
In 2022, costs incurred were $2,500,000 with remaining costs
estimated to be $3,600,000. 2022 billings were $2,750,000, and
$2,475,000 cash was collected. The project was completed in 2023
after additional costs of $3,800,000 were incurred. The company’s
fiscal year-end is December 31. This project does not qualify for
revenue recognition over time.
Required:
1. Calculate the amount of revenue and gross
profit or loss to be recognized in each of the three years.
2a. Prepare journal entries for 2021 to record the
transactions described (credit "various accounts" for construction
costs incurred).
2b. Prepare journal entries for 2022 to record the
transactions described (credit "various accounts" for construction
costs incurred).
3a. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2021.
3b. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2022.
In: Accounting
|
On August 1, 2013, Bee Clean entered its second year of operations, providing cleaning services to community centres and sports, fitness and recreation arenas as well as doing small repairs (such as to ice). On July 31, 2014, Bee Cummins, the owner, finalized the company’s records, which showed the following items. |
| Accounts payable | $ | 11,000 | Office equipment | $ | 20,800 | |
| Accounts receivable | 58,000 | Prepaid rent | 5,600 | |||
| Bee Cummins, capital, | Rent expense | 22,000 | ||||
| July 31, 2013* | 80,900 | Repair revenue | 5,700 | |||
| Bee Cummins, withdrawals | 54,000 | Service revenue | 155,000 | |||
| Cash | 7,200 | Supplies | 4,000 | |||
| Furniture | 14,800 | Supplies expense | 17,500 | |||
| Interest expense | 3,700 | Utilities expense | 11,400 | |||
| Notes payable | 36,000 | Wages expense | 69,600 | |||
|
*Hint: The ending capital balance for one period is the beginning capital balance for the next period. There were no owner investments during the year ended July 31, 2014. |
| Required: |
| . |
a.Prepare an income statement for the year ended July 31, 2014
|
|||||
In: Accounting
At the end of 2022, the following information is available for Great Adventures. Additional interest for five months needs to be accrued on the $30,000, 6% loan obtained on August 1, 2021. Recall that annual interest is paid each July 31. Assume that $10,000 of the $30,000 loan discussed above is due next year. By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $25,000 during the year and recorded those as Deferred Revenue. Great Adventures is a defendant in litigation involving a biking accident during one of its adventure races. The company believes the likelihood of payment occurring is probable, and the estimated amount to be paid is $12,000. For sales of MU watches, Great Adventures offers a warranty against defect for one year. At the end of the year, the company estimates future warranty costs to be $4,000.
1. Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
-Record the redeemed of gift cards
- Record the estimated future warranty costs
- Record entry to close the revenue accounts
- Record entry to close the expense accounts
In: Accounting
An adjusted trial balance for Bob Industries Limited at December 31, 2011 follows.
|
Debit |
Credit |
|
|
Cash |
319,000 |
|
|
Accounts Receivable |
100,000 |
|
|
Interest Payable |
0 |
5,000 |
|
Stationery Expense |
11,000 |
|
|
Interest Expense |
34,000 |
|
|
Prepaid Rent |
15,000 |
|
|
Income Tax Expense |
28,000 |
|
|
Plant and Equipment |
620,000 |
|
|
Accumulated Depreciation- P&E |
45,000 |
|
|
Accounts Payable |
141,000 |
|
|
Current portion of long-term loan payable |
25,000 |
|
|
Common Shares |
100,000 |
|
|
Retained Earnings |
421,500 |
|
|
Sales Revenue |
910,000 |
|
|
Cost of Goods Sold |
370,000 |
|
|
Advertising Expense |
18,000 |
|
|
Salaries and Wages Expense |
87,000 |
|
|
Dividends |
23,000 |
|
|
Depreciation Expense |
13,000 |
|
|
Rent Expense |
90,000 |
|
|
Inventory |
55,000 |
|
|
Long-term Loan Receivable |
250,000 |
|
|
Non-current Portion of Long-term Loan Payable |
350,000 |
|
|
Stationery |
2,500 |
|
|
Unearned Revenue |
21,000 |
|
|
Wages Payable |
17,000 |
|
|
2,035,500 |
2,035,500 |
|
Prepare, in good form, the balance sheet’s Total Asset and Shareholders’ Equity sections only at December 31, 2011, with items classified as current or non-current. Disclose all calculations and explanations
In: Accounting
|
The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 21 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. |
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | ||||||
| Investment | $ | 26,900 | ||||||||
| Sales revenue | $ | 14,000 | $ | 15,600 | $ | 17,000 | $ | 13,500 | ||
| Operating costs | 3,200 | 3,250 | 4,800 | 3,400 | ||||||
| Depreciation | 6,725 | 6,725 | 6,725 | 6,725 | ||||||
| Net working capital spending | 330 | 230 | 285 | 180 | ? | |||||
| a. |
Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) |
| b. |
Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.) |
| c. |
Suppose the appropriate discount rate is 10 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
1. Research the Financial Statement for Verizon Communications Inc.
2. Define the following ratios, include the ratio for your business and explain what each ratio means for the business moving forward.
Return on assets
Return on equity
Return on capital
Gross margin
SG&A margin
Current ratio
Quick ratio
Total debt/equity
Total revenue
Gross profit
3. Explain which ratios you feel are most important for the business and why.
You can refer to the attached table or use the following website....
https://financials.morningstar.com/ratios/r.html?t=0P000005QY&culture=en&platform=sal
| Verizon Communications Inc | 2017 | 2018 | 2019 | |
|
Return on assets |
12.01 | 5.95 | 6.92 | |
|
Return on equity |
91.74 | 32.27 | 33.64 | |
|
Return on capital |
22.62 | 11.89 | 12.9 | |
|
Gross margin |
59.1 | 57.6 | 58.5 | |
| SG&A margin | 22.48 | 23.75 |
22.74 |
|
|
Current ratio |
0.91 | 0.91 | 0.84 | |
|
Quick ratio |
0.77 | 0.73 | 0.62 | |
| Total debt / equity | 2.64 | 1.99 |
1.94 |
|
| Total revenue (millions of US $) | 126,034 | 130,863 | 131,868 | |
| Gross profit (millions of US $) | 72,971 | 75,355 | 77,142 |
In: Finance
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
| Fixed Component per Month |
Variable Component per Job |
Actual Total for February |
|||||||
| Revenue | $ | 279 | $ | 30,730 | |||||
| Technician wages | $ | 8,500 | $ | 8,350 | |||||
| Mobile lab operating expenses | $ | 4,800 | $ | 32 | $ | 8,480 | |||
| Office expenses | $ | 2,800 | $ | 2 | $ | 2,890 | |||
| Advertising expenses | $ | 1,600 | $ | 1,670 | |||||
| Insurance | $ | 2,900 | $ | 2,900 | |||||
| Miscellaneous expenses | $ | 960 | $ | 1 | $ | 385 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $32 per job, and the actual mobile lab operating expenses for February were $8,480. The company expected to work 120 jobs in February, but actually worked 126 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting
Item a: The adjusted trial balance of Entity B included the following selected accounts:
Debit Credit
Sales Revenue $645,000
Sales Returns and Allowances $ 50,000
Sales Discounts 9,500
Cost of Goods Sold 396,000
Freight-Out 2,000
Advertising Expense 15,000
Interest Expense 19,000
Salaries and Wages Expense 84,000
Utilities Expense 23,000
Depreciation Expense. 3,500
Interest Revenue b 25,000
Instructions
1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2022.
2. Calculate the profit margin and gross profit rate.
3. Suggest three ways that either the gross profit rate or profit margin might be increased.
Item b: Entity C sold Entity D $10,000 of merchandise, terms 3/10, net 30. Entity C paid $5,000 for the merchandise.
Instructions
1. Journalize the sale on Entity C's books.
2. If Entity D returned 2500 of the merchandise, and paid for the remainder 11 days from the date of the sales invoice, how much did Entity D remit (pay) Entity C?
In: Accounting
On February 1, 2018, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,075,000. During 2018, costs of $2,030,000 were incurred, with
estimated costs of $4,030,000 yet to be incurred. Billings of
$2,536,000 were sent, and cash collected was $2,280,000.
In 2019, costs incurred were $2,536,000 with remaining costs
estimated to be $3,645,000. 2019 billings were $2,786,000, and
$2,505,000 cash was collected. The project was completed in 2020
after additional costs of $3,830,000 were incurred. The company’s
fiscal year-end is December 31. This project does not qualify for
revenue recognition over time.
Required:
1. Calculate the amount of revenue and gross
profit or loss to be recognized in each of the three years.
2a. Prepare journal entries for 2018 to record the
transactions described (credit "various accounts" for construction
costs incurred).
2b. Prepare journal entries for 2019 to record the
transactions described (credit "various accounts" for construction
costs incurred).
3a. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2018.
3b. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2019.
In: Accounting