In 2018, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2020. Information related to
the contract is as follows:
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,580,000 | $ | 4,042,000 | $ | 2,175,800 | |||
| Estimated costs to complete as of year-end | 6,020,000 | 1,978,000 | 0 | ||||||
| Billings during the year | 2,060,000 | 4,562,000 | 3,378,000 | ||||||
| Cash collections during the year | 1,830,000 | 4,200,000 | 3,970,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
5. Calculate the amount of revenue and gross
profit (loss) to be recognized in each of the three years assuming
the following costs incurred and costs to complete information.
(Do not round intermediate calculations and round your
final answers to the nearest whole dollar amount. Loss amounts
should be indicated with a minus sign.)
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,580,000 | $ | 3,830,000 | $ | 3,990,000 | |||
| Estimated costs to complete as of year-end | 6,020,000 | 4,160,000 | 0 | ||||||
In: Accounting
| Below are three independent and unrelated errors. |
| a. |
On December 31, 2015, Wolfe-Bache Corporation failed to accrue office supplies expense of $1,300. In January 2016, when it received the bill from its supplier, Wolfe-Bache made the following entry: |
| Office supplies expense | 1,300 | ||
| Cash | 1,300 | ||
| b. |
On the last day of 2015, Midwest Importers received a $80,000 prepayment from a tenant for 2016 rent of a building. Midwest recorded the receipt as rent revenue. |
| c. |
At the end of 2015, Dinkins-Lowery Corporation failed to accrue interest of $7,000 on a note receivable. At the beginning of 2016, when the company received the cash, it was recorded as interest revenue. |
| Required: |
| For each error: |
| 1. |
What would be the effect of each error on the income statement and the balance sheet in the 2015 financial statements? |
| 2. |
Prepare any journal entries each company should record in 2016 to correct the errors. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
In: Accounting
In: Accounting
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,072,000 $ 2,738,000 $ 2,849,000 Estimated costs to complete as of year-end 5,328,000 2,590,000 0 Billings during the year 2,160,000 2,650,000 5,190,000 Cash collections during the year 1,880,000 2,700,000 5,420,000 Westgate recognizes revenue over time according to percentage of completion. 5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 2022 2023 Costs incurred during the year $ 2,072,000 $ 3,880,000 $ 4,140,000 Estimated costs to complete as of year-end 5,328,000 4,260,000 0
In: Accounting
In 2018, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2020. Information related to
the contract is as follows:
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,072,000 | $ | 2,738,000 | $ | 2,849,000 | |||
| Estimated costs to complete as of year-end | 5,328,000 | 2,590,000 | 0 | ||||||
| Billings during the year | 2,160,000 | 2,650,000 | 5,190,000 | ||||||
| Cash collections during the year | 1,880,000 | 2,700,000 | 5,420,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
rev: 09_15_2017_QC_CS-99734
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,072,000 | $ | 3,880,000 | $ | 3,280,000 | |||
| Estimated costs to complete as of year-end | 5,328,000 | 3,180,000 | 0 | ||||||
In: Accounting
the adjusted trial balance for china tea company at
December 31 2018, is presented below
cash 11,300
account receivable 158,000
prepaid rent 5,800
inventory 33,000
equipment 380,000
accumulated depreciation- equipment 133,000
account
payable.
38,000
notes payable- due in three months.
38,000
salaries
payable.
4,800
interest
payable
1,800
common
stock.
240,000
retained
earnings.
67,600
sales
revenue.
480,000
costs of goods sold 220,000
salaries expense 128,000
rent expense 23,000
depreciation expense 38,000
interest expense 2,800
advertising expense 3,300
totals.
1,003,200.
1,00,200
prepare the closing entries for china tea company for the year
ended December 31 2018.(if no entry is required for a
transaction/event select no journal entry required in the first
account field.)
1record the entry to close the revenue accounts using the income
summary.
2
record the entry to close the expense accounts using the income
summary
3
record the entry to close the income summary account
In: Accounting
In 2021, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2023. Information related to
the contract is as follows:
| 2021 | 2022 | 2023 | |||||||
| Cost incurred during the year | $ | 2,490,000 | $ | 3,984,000 | $ | 2,008,600 | |||
| Estimated costs to complete as of year-end | 5,810,000 | 1,826,000 | 0 | ||||||
| Billings during the year | 2,030,000 | 4,444,000 | 3,526,000 | ||||||
| Cash collections during the year | 1,815,000 | 3,900,000 | 4,285,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
5. Calculate the amount of revenue and gross
profit (loss) to be recognized in each of the three years assuming
the following costs incurred and costs to complete information.
(Do not round intermediate calculations and round your
final answers to the nearest whole dollar amount. Loss amounts
should be indicated with a minus sign.)
| 2021 | 2022 | 2023 | |||||||
| Costs incurred during the year | $ | 2,490,000 | $ | 3,815,000 | $ | 3,945,000 | |||
| Estimated costs to complete as of year-end | 5,810,000 | 4,130,000 | 0 | ||||||
In: Accounting
In 2021, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2023. Information related to
the contract is as follows:
| 2021 | 2022 | 2023 | |||||||
| Cost incurred during the year | $ | 2,490,000 | $ | 3,984,000 | $ | 2,008,600 | |||
| Estimated costs to complete as of year-end | 5,810,000 | 1,826,000 | 0 | ||||||
| Billings during the year | 2,030,000 | 4,444,000 | 3,526,000 | ||||||
| Cash collections during the year | 1,815,000 | 3,900,000 | 4,285,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
4. Calculate the amount of revenue and gross
profit (loss) to be recognized in each of the three years assuming
the following costs incurred and costs to complete information.
(Do not round intermediate calculations and round your
final answers to the nearest whole dollar amount. Loss amounts
should be indicated with a minus sign.)
| 2021 | 2022 | 2023 | |||||||
| Costs incurred during the year | $ | 2,490,000 | $ | 3,815,000 | $ | 3,215,000 | |||
| Estimated costs to complete as of year-end | 5,810,000 | 3,115,000 | 0 | ||||||
In: Accounting
Differential Analysis Report for a Discontinued Product
The condensed product-line income statement for Porcelain Tableware Company is as follows:
|
PORCELAIN TABLEWARE COMPANY Product-Line Income Statement |
||||||||
| Bowls | Plates | Cups | ||||||
| Sales | $658,000 | $903,000 | $272,000 | |||||
| Cost of goods sold | (271,000) | (335,000) | (154,000) | |||||
| Gross profit | $387,000 | $568,000 | $118,000 | |||||
| Selling and administrative expenses | (289,000) | (344,000) | (144,000) | |||||
| Operating income (loss) | $98,000 | $224,000 | $(26,000) | |||||
Fixed costs are 42% of the cost of goods sold and 16% of the selling and administrative expenses. Porcelain Tableware assumes that fixed costs would not be significantly affected if the Cups line were discontinued.
a. Prepare a differential analysis report for all three products.
| PORCELAIN TABLEWARE COMPANY | |||
| Product Income | |||
| Differential Analysis Report | |||
| Bowls | Plates | Cups | |
| Differential revenue from monthly sales: | |||
| Revenue from sales | $ | $ | $ |
| Differential costs of monthly sales: | |||
| Variable cost of goods sold | $ | $ | $ |
| Variable selling and administrative expenses | |||
| $ | $ | $ | |
| Monthly differential income from sales | $ | $ | $ |
In: Accounting
In 2018, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2020. Information related to
the contract is as follows:
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,580,000 | $ | 4,042,000 | $ | 2,175,800 | |||
| Estimated costs to complete as of year-end | 6,020,000 | 1,978,000 | 0 | ||||||
| Billings during the year | 2,060,000 | 4,562,000 | 3,378,000 | ||||||
| Cash collections during the year | 1,830,000 | 4,200,000 | 3,970,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,580,000 | $ | 3,830,000 | $ | 3,230,000 | |||
| Estimated costs to complete as of year-end | 6,020,000 | 3,130,000 | 0 | ||||||
In: Accounting