Prepare the related balance sheet account numbers

Assignment Help Financial Accounting

Reference no: EM131219480

In spring 2014, Eva Engineering Company signed a contract with the city of Springfield, to construct a new city hall. Eva expects to construct the building within two years and incur expenses of $120 million, which means the company earns a $40 million profit on the contract. The city of Springfield paid $40 million when the contract was signed, $80 million within the next six months, and the final $40 million exactly one year from the signing of the contract. Eva incurred $48 million in costs during 2014 and rest in 2015 to complete the contract on time.

Show all formulas to calculate the solutions below.

Using the percentage-of-completion method, prepare the related FSET entries and the Income Statement to the Gross Profit line for 2014 and in 2015.

Using the completed contract method, prepare the related Balance Sheet account numbers and the Income Statement to the Gross Profit line for 2014 and in 2015.

Reference no: EM131219480

Questions Cloud

Direct labor-manufacturing overhead or period costs : Alex Industries manufacturers a famous brand of skateboard. The model is #1 in the market and Alex has a backlog of orders. The company's production capacity is 1,250 skateboards per month but the company has been maintaining 80% of full capacity, i...

Discuss an explanation that is not consistent with the EMH : Value. You analyzed the returns of a sample of stocks. You found that, on average, the firms with high E/P ratios have higher subsequent returns. (i) Discuss an explanation for this pattern that is consistent with the EMH. (ii) Discuss an explanation..

All are related to the use of delivery equipment : The following transactions, adjusting entries, and closing entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. 2014 ..

Prepare the related balance sheet account numbers : In spring 2014, Eva Engineering Company signed a contract with the city of Springfield, to construct a new city hall. Eva expects to construct the building within two years and incur expenses of $120 million, which means the company earns a $40 milli..

LIFO methods of accounting for inventory : Compute the company’s cost of goods sold and inventory balances for fiscal 2013 assuming the company used a) FIFO and b) LIFO methods of accounting for inventory:

Units-of-output method and double-declining-balance method : Razar Sharp Company purchased equipment on July 1, 2014, for $33,750. The equipment was expected to have a useful life of three years, or 5,940 operating hours, and a residual value of $1,080. Determine the amount of depreciation expense for the year..

What caused the stock price of the company to drop : SunPower Corp. slumped after the second-biggest U.S. solar manufacturer scrapped a target to at least break even this year, in part because of challenging conditions in its power-plant business. What caused the stock price of the company (sunpower co..

Use the stainless steel pump rather than new brass pump : A pump has failed in a facility that will be completely replaced in 3 years. A brass pump costing $6000 installed will last 3 years. However, a used stainless steel pump that should last 3 more years has been sitting in the maintenance shop for a yea..

User Account

All Pages