Determine net income for nomar for 2013

Assignment Help Financial Accounting

Reference no: EM13176289

Nomar Industries, Inc. operates in several lines of business, including the construction and real estate industries. While the majority of its revenues are recognized at point of sale, Nomar appropriately recognizes revenue on long-term construction contracts using the percentage-of-completion method.

It recognizes sales of some properties using the installment-sales approach. Income data for 2013 from operations other than construction and real estate are as follows:

Revenues $5,500,000
Expenses 4,200,000

1. Nomar started a construction project during 2012. The total contract price is $500,000, and $100,000 in costs were incurred in 2013. Estimated costs to complete the project in 2014 are $200,000. In 2012, Nomar incurred $100,000 of costs and recognized $25,000 gross profit on this project. Total billings at the end of 2013 were $230,000, and total cash collected as of the end of 2013 was $202,500. 2. During this year, Nomar sold real estate parcels at a price of $480,000. Nomar recognizes gross profit at an 18% rate when cash is received. Nomar collected $220,000 during the year on these sales. Determine net income for Nomar for 2013. Ignore income taxes.

Prepare the journal entries to record the costs incurred and gross profit recognized in 2013 on the construction project.

For 2013, show how the details related to this construction contract would be disclosed on the balance sheet.

Nomar is negotiating real estate sales with some new customers which are more uncertain as to the customers' ability to make all payments. Is there a more appropriate revenue recognition policy for these customers? Explain.

Reference no: EM13176289

Questions Cloud

Birth of a healthy grandson : After receiving exciting news about the birth of a healthy grandson, Mr. Haney was easily persuaded to contribute a generous sum of money to a neighborhood church. This best illustrates the

Calculate the volume the gas would occupy at stp : A gas occupies a volume of 449 mL at 12.9°C and 737 mm Hg pressure. Calculate the volume the gas would occupy at STP.

Explai if these price increases are demand or supply induced : During the energy crisis of the 1970s, and again in the last 5 years, Congress bemoaned the "price gouging" and "windfall" profits of the major oil companies. In the 1970s Congress imposed an "excess profits tax" on these co..

Important business decision : Why is selecting computer hardware and software for the organization an important business decision? What factors should be considered?

Determine net income for nomar for 2013 : Determine net income for Nomar for 2013. Ignore income taxes and prepare the journal entries to record the costs incurred and gross profit recognized in 2013 on the construction project.

Determine the amino acid sequence of a heptapeptide : Determine the amino acid sequence of a heptapeptide from the following data. Briefly explain the meaning of the results in each of the following treatments.

What is the molarity of the hcl solution : The titration of 15.00 mL of HCl solution requires 22.50 mL of 0.1200 M NaOH solution. What is the molarity of the HCl solution?

How many joules of energy are necessary to heat the steam : A sample of H½O with a mass of 46.0 grams has a temperature of -58.0 àC. How many joules of energy are necessary to heat the steam from 100.0 àC to 114.0 àC if the specific heat of steam is 2.01 J/g àC?

Which one is oxidizing agent and which one is reducing agent : which one is oxidizing agent and which one is reducing agent?

User Account

All Pages