Tricky Ricky Construction Company, Inc., entered a fixed-price contract with Gracelyn Associates on July 1, 2021, to construct a four-story office building. At that time, Tricky Ricky estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,000,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gracelyn under the contract were as follows:

Required:
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Tricky Ricky concludes that the contract does not qualify for revenue recognition over time.

2. Assuming Tricky Ricky recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years

Masters Ltd has just realised that it has a problem with sales data as its sales order system records sales to customers that subsequently fail a credit check. a) What decisions made during the revenue cycle would be affected by this data problem? How can the problem be corrected? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ b) How would this data problem affect the performance of the revenue cycle? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Question 3 continued next page Practice Questions Accounting Systems and Information Assurance - ACCT20072 Page 5 of 7 Question 3 continued Griffith Ltd has just realised that it has a timeliness problem with its general ledger data. It updates daily transactional data from subsidiary systems to the general ledger weekly; however, general ledger reports are available on an unrestricted basis. The CFO recently realised that some users do not know that they need to wait until after the Sunday night update to run their month-end reports. c) What decisions made during the general ledger and financial reporting cycle would potentially be affected by this data problem? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ d) How would this data problem affect the reported results of the organisation?

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 $ 39,100 Technician wages $ 8,100 $ 7,950 Mobile lab operating expenses $ 4,900 $ 32 $ 9,540 Office expenses $ 2,600 $ 4 $ 3,050 Advertising expenses $ 1,600 $ 1,670 Insurance $ 2,880 $ 2,880 Miscellaneous expenses $ 950 $ 2 $ 555 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $32 per job, and the actual mobile lab operating expenses for February were $9,540. The company expected to work 150 jobs in February, but actually worked 156 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.)

McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin of at least 15 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost.

Manufacturing overhead for year 1 totaled $935,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following:

Required:

a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks.

a-2. Which of the two products should be dropped?

b. Regardless of your answer in requirement (a), the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $720,000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 2? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 1 decimal place.)

A complete small business computer system costs $40,000. In addition, it paid a consultant $1000 last year for her advice on the type of computer system the company should buy. The new computer falls under the 5-year MACRS. This new system is expected to generate additional revenue of $15,000 per year for the next 3 years and also reduce expenses by $10,000 per year. At the end of 3 years, the system will be sold for $17,500. Tax rate is 34%. Round all values to the nearest dollar. Calculate initial investment, operating cash flows and terminal cash flow.

can you please show me terminal cash flow

here's what I have and clarify I'm right for first parts, thanks!

Initial Investment

Cost 40,000

Total Initial 40,000

Prepare journal entries in general journal format to record the following transactions for the City of Dallas General Fund (subsidiary detail may be omitted)

1. The budget prepared for the fiscal year included total estimated revenues of $4,693,000, appropriations of $4,686,000 and estimated other financing uses of $225,000.

2. Purchase orders in the amount of $451,000 were mailed to vendors.

3. The current year’s tax levy of $4,005,000 was recorded; uncollectible taxes were estimated to be 2% of the tax levy.

4. Collections of delinquent taxes from prior years’ levies totaled $82,700; collections of the current year’s levy totaled $3,524,900.

5. Invoices were received and approved for payment for items ordered in documents recorded as encumbrances in transaction (#2) of this problem. The estimated liability for the related items was $351,200. Actual invoices were $353,500.

6. Revenue other than taxes collected during the year consisted of licenses and permits, $177,600; intergovernmental revenue, $600,000; and $26,042 of miscellaneous revenues.

7. Property taxes of $7,000 and related interest and penalties of $925 were written off because of an inability to locate property owners.

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

• Each T-shirt is expected to sell for $18.
• The purchasing manager buys the T-shirts for $7 each.
• The company needs to have enough T-shirts on hand at the end of each quarter to fill 28 percent of the next quarter’s sales demand.
• Selling and administrative expenses are budgeted at $86,000 per quarter plus 15 percent of total sales revenue.

Required:
1. Determine budgeted sales revenue for quarters 1, 2, and 3.
2. Determine budgeted cost of merchandise purchased for quarters 1, 2, and 3.
3. Determine budgeted cost of good sold for quarters 1, 2, and 3.
4. Determine selling and administrative expenses for quarters 1, 2, and 3.
5. Complete the budgeted income statement for quarters 1, 2, and 3.

Suppose you are the marketing analyst for Albertsons in Texas. You are requested to estimate the effect on weekly gross revenues of a promotion involving a retail price cut of 25% in Butterball whole turkeys. Currently 20,000 turkeys are sold per week at an average price of $40.00 per turkey. You found out that turkey demand has an own price elasticity of –1.80 Your supervisor is waiting for your analysis.

a. What is the current weekly total revenue (before the price change) from whole turkeys? 3 points

b. What is the projected increased (quantity) in turkeys sold? (after the price cut) Hint: use the definition of own price elasticity! 5 points

c. .What is the projected weekly total revenue (after price change)? 4 points.

d. What would you recommend? 2 points

e. If cross price elasticity between turkey and chicken is + 0.30 and weekly sales of chicken are 40,000 pounds. What would be the impact of the new turkey price on weekly quantity sales of chicken (quantity of chicken pounds sold) (4 points)
Hint; use the concept of cross-price elasticity).

Exercise 4-5 Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to Nash Company ($000 omitted). Administrative expense Officers' salaries $5,135 Depreciation of office furniture and equipment 4,195 Cost of goods sold 60,805 Rent revenue 17,465 Selling expense Delivery expense 2,925 Sales commissions 8,215 Depreciation of sales equipment 6,715 Sales revenue 96,735 Income tax 9,305 Interest expense 2,095 Common shares outstanding for 2017 total 40,550 (000 omitted). Prepare an income statement for the year 2017 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.) NASH COMPANY Income Statement (In thousands, except earnings per share) $ $ $ $ $ SHOW LIST OF ACCOUNTS Prepare an income statement for the year 2017 using the single-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.) NASH COMPANY Income Statement (In thousands, except earnings per share) $ $ $

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:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,700 plus $31 per job, and the actual mobile lab operating expenses for February were $8,880. The company expected to work 140 jobs in February, but actually worked 144 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.)