Below is the post-closing trial balance of Gracie Consultancy Services as at 30 June 2019:
|
Debit $ |
Credit $ |
|
|
Cash at bank |
38250 |
|
|
Accounts receivable |
8250 |
|
|
Equipment |
40500 |
|
|
Accumulated depreciation - Equipment |
675 |
|
|
Accounts payable |
14250 |
|
|
Wages payable |
4500 |
|
|
Revenue received in advance |
2625 |
|
|
Gracie, Capital |
|
64950 |
|
87000 |
87000 |
The following transactions occurred during the month July 2019.
|
July |
1 |
Paid employee salaries, $4500 for June. Gracie pays her employees’ accrued salaries on the first day of each calendar month. |
|
8 |
Invoiced customers for consultancy services performed, $13100. |
|
|
14 |
Performed $1125 of services for customers who paid in advance in June for consultancy services to be performed in July. |
|
|
15 |
Paid $8100 for 4 months office building rent. |
|
|
25 |
Gracie redrew capital of $1800. |
|
|
31 |
Purchased office supplies on account for $1350. |
Required
a) Journalise the transactions, including narrations.
b) Prepare an unadjusted trial balance as at 31 July 2019. (Total 20 Marks)
a)
|
General Journal |
|||
|
Date |
Account name and narration |
Debit $ |
Credit $ |
b)
|
Gracie Consultancy Services |
||
|
Trial balance |
||
|
as at 31 July 2019 |
||
|
Account name |
Debit $ |
Credit $ |
In: Accounting
| Core Constructions Company | ||||
| Trial Balance | ||||
| for the Month Ending December 31, 2019 | ||||
| Account Title | Debit | Credit | ||
| 100-Cash | 600 | |||
| 101-Accounts Receivable | 300 | |||
| 102-Supplies | 12,500 | |||
| 103-Prepaid Rent | 24,000 | |||
| 150-Computer (Cost) | 125,000 | |||
| 151-Accumulated Depreciation | 1,500 | |||
| 200-Accounts Payable | 200 | |||
| 201-Unearned Revenue | 60,000 | |||
| 202-Salaries & Wages Payable | 0 | |||
| 300-Owner's Capital | 35,600 | |||
| 301-Owner's Drawings | 5,500 | |||
| 400-Sales Revenue | 200,000 | |||
| 500-Telephone Expense | 3,600 | |||
| 601-Salaries & Wages Expense | 125,800 | |||
| 650-Supplies Expense | 0 | |||
| 750-Depreciation Expense | 0 | |||
| 790-Rent Expense | 0 | |||
| 297,300 | 297,300 | |||
| Adjustments: | ||||
| 1. The Supplies balance on December 31st is $5,500. | ||||
| 2. The Prepaid Rent is for 24-months | ||||
| 3. December depreciation expense is $500. | ||||
| 4. $40,000 of Unerned Revenue was used up in December. | ||||
| 5. Receipts for services completed in December for $15,000 was | ||||
| collected on January 4, 2020. | ||||
| 6. The December 2019 telephone bill for $300 was received and | ||||
| paid on January 5, 2020. | ||||
| 7. The weekly salary for $6,000 will be paid on Friday, January 2nd. | ||||
| Please write in the Diagonal Box the balances for the following: | ||||
| a. Salaries & Wages Payable | ||||
| b. Net Profit | ||||
| (Please do not show your work, only the answer) | ||||
In: Accounting
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$4,240,000. Curtiss concludes that the contract does not qualify
for revenue recognition over time. The building was completed on
December 31, 2020. Estimated percentage of completion, accumulated
contract costs incurred, estimated costs to complete the contract,
and accumulated billings to Axelrod under the contract
were as follows:
| At 12-31-2018 | At 12-31-2019 | At 12-31-2020 | |||||||||
| Percentage of completion | 10 | % | 60 | % | 100 | % | |||||
| Costs incurred to date | $ | 363,000 | $ | 2,688,000 | $ | 4,534,000 | |||||
| Estimated costs to complete | 3,267,000 | 1,792,000 | 0 | ||||||||
| Billings to Axelrod, to date | 724,000 | 2,250,000 | 4,240,000 | ||||||||
Required:
1. Compute gross profit or loss to be recognized as a
result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute gross profit or loss
to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute the amount to be
shown in the balance sheet at the end of 2018 and 2019 as either
cost in excess of billings or billings in excess of costs.
In: Accounting
Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $5,020,000. 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 Axelrod under the contract were as follows: At 12-31-2021 At 12-31-2022 At 12-31-2023 Percentage of completion 10 % 60 % 100 % Costs incurred to date $ 376,000 $ 3,234,000 $ 5,457,000 Estimated costs to complete 3,384,000 2,156,000 0 Billings to Axelrod, to date 737,000 2,510,000 5,020,000 Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. 3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs. Please help me solve this problem!
In: Accounting
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$5,020,000. Curtiss concludes that the contract does not qualify
for revenue recognition over time. The building was completed on
December 31, 2020. Estimated percentage of completion, accumulated
contract costs incurred, estimated costs to complete the contract,
and accumulated billings to Axelrod under the contract
were as follows:
| At 12-31-2018 | At 12-31-2019 | At 12-31-2020 | |||||||||
| Percentage of completion | 10 | % | 60 | % | 100 | % | |||||
| Costs incurred to date | $ | 376,000 | $ | 3,234,000 | $ | 5,457,000 | |||||
| Estimated costs to complete | 3,384,000 | 2,156,000 | 0 | ||||||||
| Billings to Axelrod, to date | 737,000 | 2,510,000 | 5,020,000 | ||||||||
Required:
1. Compute gross profit or loss to be recognized as a
result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute gross profit or loss
to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute the amount to be
shown in the balance sheet at the end of 2018 and 2019 as either
cost in excess of billings or billings in excess of costs.
In: Accounting
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2021, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$4,480,000. 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 Axelrod under the contract were as
follows:
| At 12-31-2021 | At 12-31-2022 | At 12-31-2023 | |||||||||
| Percentage of completion | 10 | % | 60 | % | 100 | % | |||||
| Costs incurred to date | $ | 367,000 | $ | 2,856,000 | $ | 4,818,000 | |||||
| Estimated costs to complete | 3,303,000 | 1,904,000 | 0 | ||||||||
| Billings to Axelrod, to date | 728,000 | 2,330,000 | 4,480,000 | ||||||||
Required:
1. Compute gross profit or loss to be recognized as a
result of this contract for each of the three years. Curtiss
concludes that the contract does not qualify for revenue
recognition over time.
2. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute gross profit or loss
to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute the amount to be
shown in the balance sheet at the end of 2021 and 2022 as either
cost in excess of billings or billings in excess of costs.
In: Accounting
On July 1, 2018, Gupta Corporation bought 30% of the outstanding
common stock of VB Company for $170 million cash. At the date of
acquisition of the stock, VB’s net assets had a total fair value of
$490 million and a book value of $220 million. Of the $270 million
difference, $50 million was attributable to the appreciated value
of inventory that was sold during the last half of 2018, $160
million was attributable to buildings that had a remaining
depreciable life of 10 years, and $60 million related to equipment
that had a remaining depreciable life of 5 years. Between July 1,
2018, and December 31, 2018, VB earned net income of $60 million
and declared and paid cash dividends of $50 million.
Required:
1. Prepare all appropriate journal entries related
to the investment during 2018, assuming Gupta accounts for this
investment by the equity method.
2. Determine the amounts to be reported by Gupta.
(amounts in millions)
| Journal | Debit | Credit | |
| 1 | Investment in VB Shares | 170m | |
| Cash | 170m | ||
| 2 | Investment in VB Shares | ??? | |
| Investment Revenue | ??? | ||
| 3. | Cash | 15m | |
| Investment in VB Shares | 15m | ||
| 4 | Investment Revenue | ??? | |
| Investment in VB Shares | ??? |
| a Investment in Gupta's balance sheet | |
| b. investment revenue (loss) in Gupta's 2018 income statement | |
| c. investing activities in Gupta's 2018 statement of cash flows |
In: Accounting
Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2018, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,660,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2020. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: At 12-31-2018 At 12-31-2019 At 12-31-2020 Percentage of completion 10 % 60 % 100 % Costs incurred to date $ 405,000 $ 2,940,000 $ 5,031,000 Estimated costs to complete 3,260,000 2,030,000 0 Billings to Axelrod, to date 885,000 2,390,000 4,660,000 Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. 3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2018 and 2019 as either cost in excess of billings or billings in excess of costs.
In: Accounting
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$5,080,000. Curtiss concludes that the contract does not qualify
for revenue recognition over time. The building was completed on
December 31, 2020. Estimated percentage of completion, accumulated
contract costs incurred, estimated costs to complete the contract,
and accumulated billings to Axelrod under the contract
were as follows:
| At 12-31-2018 | At 12-31-2019 | At 12-31-2020 | |||||||||
| Percentage of completion | 10 | % | 60 | % | 100 | % | |||||
| Costs incurred to date | $ | 377,000 | $ | 3,276,000 | $ | 5,528,000 | |||||
| Estimated costs to complete | 3,393,000 | 2,184,000 | 0 | ||||||||
| Billings to Axelrod, to date | 738,000 | 2,530,000 | 5,080,000 | ||||||||
Required:
1. Compute gross profit or loss to be recognized as a
result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute gross profit or loss
to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute the amount to be
shown in the balance sheet at the end of 2018 and 2019 as either
cost in excess of billings or billings in excess of costs.
In: Accounting
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$4,780,000. Curtiss concludes that the contract does not qualify
for revenue recognition over time. The building was completed on
December 31, 2020. Estimated percentage of completion, accumulated
contract costs incurred, estimated costs to complete the contract,
and accumulated billings to Axelrod under the contract
were as follows:
| At 12-31-2018 | At 12-31-2019 | At 12-31-2020 | |||||||||
| Percentage of completion | 10 | % | 60 | % | 100 | % | |||||
| Costs incurred to date | $ | 372,000 | $ | 3,066,000 | $ | 5,173,000 | |||||
| Estimated costs to complete | 3,348,000 | 2,044,000 | 0 | ||||||||
| Billings to Axelrod, to date | 733,000 | 2,430,000 | 4,780,000 | ||||||||
Required:
1. Compute gross profit or loss to be recognized as a
result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute gross profit or loss
to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time
according to percentage of completion, compute the amount to be
shown in the balance sheet at the end of 2018 and 2019 as either
cost in excess of billings or billings in excess of costs.
In: Accounting