Calculate the amount of revenue

Assignment Help Financial Accounting
Reference no: EM133035974

Question - Income recognition for a contractor - On October 15, 2010, Flanikin Construction Company contracted to build a shopping center at a contract price of $180 million. The schedule of expected and actual cash collections and contract costs is as follows:

Year

Cash Collections from Customers

Estimated and Actual Cost Incurred

2010

$36,000,000

$12,000,000

2011

$45,000,000

$36,000,000

2012

$45,000,000

$48,000,000

2013

$54,000,000

$24,000,000

TOTAL

$180,000,000

$120,000,000

a) Calculate the amount of revenue, expense, and net income for each of the four years under the following revenue recognition methods: (1) Percentage-of-completion method. (2) Completed contract method.

b) Show the journal entries Flanikin will make in 2010, 2011, 2012, and 2013 for this contract. Flanikin accumulates contract costs in a Contract in Process account. Although the costs involve a mixture of cash payments, credits to assets, and credits to liability accounts, assume for purposes of this problem that all costs are recorded as credits to Accounts Payable.

c) Which method do you believe provides the better measure of Flanikin Construction Company's performance under the contract? Why?

Reference no: EM133035974

Questions Cloud

Describe the choice of research methodology : -Research Methodology: Describe and justify the choice of research methodology and why it was most suitable to solve the problems.
Strengths and weaknesses of the met technique : -Detail the overall research design in the Ohio Lottery case (See Exhibit OL1). What are the advantages and disadvantages of this design?
Case study-wil grill : In January 2017, John Christ needed to make some decisions about his business, Wil's Grill. Not long ago, his dad had said, "Son, passion has gotten you here; n
What is the legal ownership of a company : What is the legal ownership of a company? Cite academic authors.
Calculate the amount of revenue : Calculate the amount of revenue, expense, and net income for each of the four years under the following revenue recognition methods
Case study-beta sigma manufacturing company : John Andrews arrived promptly for his 10 am meeting with Martha Gillespie, the buyer for Beta Sigma Manufacturing. At 10:15, when she hadn't arrived, John asked
Describe one source of power : Describe one source of power that you have utilized or could utilize to create a more positive work environment and empower yourself?
Assessing a price earnings ratio and quality of earnings : Regarding management attitudes, Vancouver Viacom has resisted joining an increasing number of companies who along with earnings announcements make extraordinary
Differentiate advocacy platform and cautionary platform : Differentiate advocacy platform and cautionary platform? Provide examples for each.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd