An accounting must be familiar with the concept involved in determining earning of a business entity. The amount of earing reported for a business entity is dependent on the proper recognition in general of revenue and expenses at the time of product sale; in other situation, guidelines have been developed for recognizing costs as expenses or losses by other criteria.
1- Explain the rationale for recognizing costs as expenses at the time of product sale.
2-What is the rationale underlying the appropriateness of treating costs as expenses of a period instead of assigning the costs to an asset?
3- Identify the necessary conditions in which it could be appropriate to treat a cost as loss.

Ex. 18-134—Percentage-of-completion method. Penner Builders contracted to build a high-rise for €35,000,000. Construction began in 2018 and is expected to be completed in 2020. Data for 2018 and 2019 are:

   2018 2019

costs incurred to date    4.5M 13M

Estimated cost to complete 18M. 12M

Penner uses the percentage-of-completion method.

Instructions

A: How much gross profit should be reported for 2018? Show your computation.

B: How much gross profit should be reported for 2019?

C: Make the journal Entry to record the revenue and gross profit for 2019

"A firm is considering purchasing a computer system. The following data has been collected. - Cost of the system: $179,000 - Project life: 6 years - Salvage value at the end of year 6: $11,000 - Depreciation method: five-year MACRS - Tax rate: 41% - Annual revenue from project: $136,000 - Annual expenses (not including depreciation): $85,000 The firm will borrow the entire $179,000 at 7.5% interest to be repaid in 2 annual payments. The firm's MARR is 13%. Determine the IRR for the computer system. Enter your answer as a percentage between 0 and 100."

What do you understand from the following, describe all in detail, and ADD the specimens wherever applicable………

1. Audit Engagement Letter

2. Audit Appointment Letter

3. Audit Planning and Initial Assessments / Walk Through in Audits

4. Audit Verification and Six Point Technique

5. Vouching – the first step towards substantial analysis

6. Verification of Assets, Verification of Liabilities and Revenue Accounts

7. Professional Ethics for CPAs and External Audits ( All aspects )

8. Code of Corporate Governance in Saudi Arabia

• do not forget to have references of all materials and write the references at the end )

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:

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.

Please prepare the necessary journal entries for Bowlen Inc. in 2019.

Please prepare the necessary journal entries for Bowlen Inc. in 2022.

Melody Instruments, Inc. sells musical instruments. On December 31, 2017, after its first month of business, Melody Instruments, Inc. had the following balances in its accounts, listed alphabetically. Accounts Receivable $ 5,000 Accounts Payable 15,000 Advertising Expense 2,000 Building 16,500 Cash ? Common Stock 50,000 Dividends 1,200 Equipment 2,000 Land 70,000 Notes Payable 60,000 Office Supplies 3,400 Salaries Expense 4,000 Service Revenue 72,000 Utilities Expense 4,100 Determine the balance in the cash account and prepare the trial balance.

Soon to be famous, Texas Smokers, a locally owned business and manufacture of barbeque smokers wants to calculate its breakeven point for its business. Its Classic smoker sells for $335 with a unit variable cost of $235. The fixed cost is $57,000.

- What is the unit contribution margin ($)?

-What is the breakeven volume?

-What is the breakeven revenue?

-If 700 units built, what is the profit?

- If the price is raised by $50, what is the new breakeven volume?

- If the variable cost per unit is raised by $25, what is the new breakeven volume? Use the original selling price.

) Craigco currently has a contribution margin ratio of 35% and its current breakeven point is $450,000 in revenue.

a)What is Craigco’s break-even point in sales dollars if fixed costs increase by 15%?

Ans:

b) What is Craigco’s break-even point in sales dollars if fixed costs decrease by 15%?

c) What is Craigco’s break-even point in sales dollars if variable costs per unit decrease by 15%?

d) What is Craigco’s break-even point in sales dollars if variable costs per unit increase by 15%?

The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January.