Reference no: EM13237681

AC 5230 Problem Set 2
Instructions:
Create a single Excel document with one worksheet/tab for each problem. Each problem is worthProblem 1
On February 1, 2007, York Contractors agreed to construct a building at a contract price of $6,000,000. York estimated total construction costs would be $4,000,000 and the project would be finished in 2009. Information relating to the costs and billings for this contract is as follows:
2007 2008 2009
Total costs incurred to date $1,500,000 $2,640,000 $4,600,000
Estimated costs to complete 2,500,000 1,760,000 -0-
Customer billings to date 2,200,000 4,000,000 5,600,000
Collections to date 2,000,000 3,500,000 5,500,000

Directions Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should be recorded for 2007, 2008, and 2009. Create your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.


Percentage of Completion Completed-Contract
Gross Profit Gross Profit
2007 ---------------------------- 2007 ----------------------------
2008 ---------------------------- 2008 ----------------------------
2009 ---------------------------- 2009 ----------------------------


Problem 2
Part A (Part A and B are worth 
Wells Company has a beginning inventory in year one of $300,000 and an ending inventory of $363,000. The price level has increased from 100 at the beginning of the year to 110 at the end of year one. Calculate the ending inventory under the dollar-value LIFO method. 
Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.

Part B:
At the end of year two, Wells' inventory is $437,000 in terms of a price level of 115 which exists at the end of year two. Calculate the inventory at the end of year two continuing the use of the dollar-value LIFO method. 

Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.
Problem 3
The December 31, 2008 inventory of Dwyer Company consisted of four products, for which certain information is provided below.
Replacement Estimated Expected Normal Profit
Product Original Cost Cost Disposal Cost Selling Price on Sales
A $25.00 $22.00 $6.50 $40.00 20%
B $42.00 $40.00 $12.00 $48.00 25%
C $120.00 $115.00 $25.00 $190.00 30%
D $18.00 $15.80 $3.00 $26.00 10%

DirectionsUsing the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2008. Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.Problem 4
Flynt Company was formed on December 1, 2007. The following information is available from Flynt 's inventory record for Product X.
Units Unit Cost
January 1, 2008 (beginning inventory) 1,600 $18.00
Purchases:
January 5, 2008 2,600 $20.00
January 25, 2008 2,400 $21.00
February 16, 2008 1,000 $22.00
March 15, 2008 1,800 $23.00
A physical inventory on March 31, 2008, shows 2,500 units on hand.
Directions (20 Points): Prepare schedules to compute the ending inventory at March 31, 2008, under each of the following inventory methods: Prepare your response on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.

(a) FIFO.
(b) LIFO.
Show supporting computations in good form.

Problem 5
A machine cost $500,000 on April 1, 2008. Its estimated salvage value is $50,000 and its expected life is eight years.
Directions 
Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used on a separate Excel spreadsheet as directed on the Problem Set 2 instructions.

a) Straight-line for 2008

b) Double-declining balance for 2009
Required minimum-5 page