During 2020, Grouper Company started a construction job with a
contract price of $1,610,000. The job was completed in 2022. The
following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$434,300 | $859,560 | $1,073,000 | |||
|
Estimated costs to complete |
575,700 | 242,440 | –0– | |||
|
Billings to date |
301,000 | 897,000 | 1,610,000 | |||
|
Collections to date |
271,000 | 817,000 | 1,428,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
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.)
Compute the amount of gross profit to be recognized each year,
assuming the completed-contract method is used.
In: Accounting
|
|
|||||||||||||||||||||||||||||
|
In: Accounting
Crane Incorporated leases a piece of machinery to Blue Company on January 1, 2020, under the following terms.
| 1. | The lease is to be for 4 years with rental payments of $13,325 to be made at the beginning of each year. | |
| 2. | The machinery’ has a fair value of $70,328, a book value of $52,480, and an economic life of 10 years. | |
| 3. | At the end of the lease term, both parties expect the machinery to have a residual value of $26,240. To protect against a large loss, Crane requests Blue to guarantee $18,430 of the residual value, which Irving agrees to do. | |
| 4. | The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. | |
| 5. | The implicit rate is 5%, which is known by Blue. | |
| 6. | Collectibility of the payments is probable. |
Click here to view factor tables.
Evaluate the criteria for classification of the lease, and
describe the nature of the lease.
For the lessee, it is a , and for the lessors, it is a
Prepare the journal entries for Blue for the year 2020. (Credit account titles are automatically indented when the 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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 1 |
|||
|
(To record lease) |
|||
|
Jan. 1 |
|||
|
(To records first lease payment) |
|||
|
Dec. 31 |
|||
|
(To record accrued interest) |
|||
|
Dec. 31 |
|||
|
(To record amortization expense) |
Prepare the journal entries for Crane for the year 2020
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 1 |
|||
|
(To record lease) |
|||
|
Jan. 1 |
|||
|
(To record first lease payment) |
|||
|
Dec. 31 |
|||
|
(To record lease revenue) |
Evaluate the criteria for classification of the lease, and
describe the nature of the lease, assuming that Blue did not
guarantee any amount of the expected residual value.
For the lessee, it is a and for the lessor, it is a
Suppose Blue did not guarantee any amount of the expected residual value. Prepare the journal entries for Blue for the year 2020. (Credit account titles are automatically indented when the 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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 1 |
|||
|
(To record lease) |
|||
|
Jan. 1 |
|||
|
(To record first lease payment) |
|||
|
Dec. 31 |
|||
|
(To record interest and amortization) |
Suppose Blue did not guarantee any amount of the expected residual value. Prepare the journal entries for Crane for the year 2020. (Credit account titles are automatically indented when the 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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 1 |
|||
|
(To record lease payments) |
|||
|
Dec. 31 |
|||
|
(To record lease revenue) |
|||
|
Dec. 31 |
|||
|
(To record depreciation) |
In: Accounting
B1 - Snow Company started operations on February 1, 2020 by depositing $3,000,000 cash in the bank as capital. The following transactions took place during the first month of operations:
February 3: Purchased supplies for $22,500 in cash.
February 9: Purchased equipment for $255,000, paid $105,000 in cash and the remaining amount will be paid after 10 days.
February 12: Received a bill from Dubai News for advertising amounted to $1,650.
February 14: Paid $24,000 salaries in cash.
February 16: Paid $6,000 utilities expense in cash.
February 17: Provided services to customers for $195,000 in cash.
February 19: Paid $150,000 for equipment purchased on February 9.
February 28: The owner withdrew $7,500 cash for personal use.
Required:
In: Accounting
B1 - Snow Company started operations on February 1, 2020 by depositing $3,000,000 cash in the bank as capital. The following transactions took place during the first month of operations:
February 3: Purchased supplies for $22,500 in cash.
February 9: Purchased equipment for $255,000, paid $105,000 in cash and the remaining amount will be paid after 10 days.
February 12: Received a bill from Dubai News for advertising amounted to $1,650.
February 14: Paid $24,000 salaries in cash.
February 16: Paid $6,000 utilities expense in cash.
February 17: Provided services to customers for $195,000 in cash.
February 19: Paid $150,000 for equipment purchased on February 9.
February 28: The owner withdrew $7,500 cash for personal use.
Required:
In: Accounting
The Brown Company purchased equipment on June 1, 2020. Assuming the cost of the equipment is $70,000, the residual value is $6,000, a useful life of 4 years and the use of the diminishing balance method using 2 times the straight line rate. The company's year end is December 31.
Round all answers to the nearest dollar.
1) What is depreciation expense for the year ended December 31, 2020? $ Answer
2) What is the depreciation rate (%)? Answer %
3) What is accumulated depreciation for the year ended December 31, 2022? $ Answer
4) What is the carrying value of the asset for the year ended December 31, 2024? Answer
5) What is depreciation expense for the year ended December 31, 2024? $ Answer
You were asked to prepare the journal entry to record the sale of the above equipment on December 31, 2022.
Is it a gain or loss if the equipment was sold for $10,000? Answer LOSS or GAIN
How much is the gain or loss? $ Answer
In: Accounting
The Orange Company purchased equipment on June 1, 2020. Assuming the cost of the equipment is $70,000, the residual value is $6,000, a useful life of 4 years and the use of the diminishing balance method using 2 times the straight line rate. The company's year end is December 31.
Round all answers to the nearest dollar.
1) What is depreciation expense for the year ended December 31, 2020?
2) What is the depreciation rate (%)?
3) What is accumulated depreciation for the year ended December 31, 2022?
4) What is the carrying value of the asset for the year ended December 31, 2024?
5) What is depreciation expense for the year ended December 31, 2024?
You were asked to prepare the journal entry to record the sale of the above equipment on December 31, 2022.
Is it a gain or loss if the equipment was sold for $10,000?
How much is the gain or loss?
In: Accounting
The Red Company purchased equipment on June 1, 2020. Assuming the cost of the equipment is $66,000, the residual value is $6,000, a useful life of 5 years and the use of the straight line method. The company's year end is December 31.
1) What is depreciation expense at December 31, 2020? $ Answer
2) What is accumulated depreciation at December 31, 2022? $ Answer
3) What is the carrying value of the asset at December 31, 2023? $ Answer
4) What is the carrying value of the asset at January 1, 2024? $ Answer
5) What is depreciation expense at December 31, 2025? $
Answer
You were asked to prepare the journal entry to record the sale of the above equipment on December 31, 2022.
Is it a gain or loss if the equipment was sold for $30,000? Answer
How much is the gain or loss? $ Answer
In: Accounting
During 2020, Flint Company started a construction job with a contract price of $1,610,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$393,900 | $760,380 | $1,059,000 | |||
|
Estimated costs to complete |
616,100 | 341,620 | –0– | |||
|
Billings to date |
299,000 | 905,000 | 1,610,000 | |||
|
Collections to date |
268,000 | 818,000 | 1,421,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$enter a dollar amount |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$enter a dollar amount |
|
|
Gross profit recognized in 2022 |
$enter a dollar amount |
List of Accounts
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.) |
List of Accounts
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Gross profit |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
In: Accounting
During 2020, Nash 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 |
$444,400 | $867,420 | $1,060,000 | |||
|
Estimated costs to complete |
565,600 | 230,580 | –0– | |||
|
Billings to date |
301,000 | 904,000 | 1,620,000 | |||
|
Collections to date |
272,000 | 814,000 | 1,411,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$enter a dollar amount |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$enter a dollar amount |
|
|
Gross profit recognized in 2022 |
$enter a dollar amount |
List of Accounts
Question Part Score
--/9
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.) |
List of Accounts
Question Part Score
--/6
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Gross profit |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
In: Accounting