Reference no: EM13349211
Question :
1. Boise Marine sells jet skis and other powered recreational equipment. Customers are committed to pay 1/3 of the sales price of a jet ski within one week of the purchase, and then pay another 1/3 each year for the next two years. Boise has little information about collectability of these receivables, but they can normally repossess a ski and resell it without incurring a loss. In 2008 Boise began operations and sold jet skis with a total price of $900,000 that cost Boise $450,000. Boise actually collected $300,000 in 2008, $300,000 in 2009, and $300,000 in 2010 associated with those sales. In 2009 Boise sold jet skis with a total price of $1,500,000 that cost Boise $900,000. Boise actually collected $500,000 in 2009, $300,000 in 2010, and $250,000 in 2011 associated with those sales. In 2011 Boise also repossessed $200,000 of jet skis that were sold in 2009. Those jet skis had a fair value of $75,000 at the time they were repossessed.
Required:
1) Create all required 2008, 2009, 2010 and 2011 journal entries.
2) Evaluate the balance sheet presentation of only the accounts specific to the accounting you have selected to apply (i.e. disregard cash) for 2008, 2009, and 2010.
3 URS received a contract to construct a mental health facility for $2,000,000. Construction was started in 2013 and completed in 2016. Actual cost incurred during each year was $900,000 in 2013, $1,000,000 in 2014, $1,000,000 in 2015 and $500,000 in 2016. URS effectively negotiated a contract change order of $500,000 2014. In 2015 they effectively negotiated another change order of $2,000,000. URS billed $800,000 in 2013, $900,000 in 2014, $1,200,000 in 2015, and $1,600,000 in 2016. URS collected cash of $700,000 in 2013, $850,000 in 2014, $1,150,000 in 2015, and $1,400,000 in 2016.
Scenario1 - Consider that URS uses the percentage-of-completion method for revenue recognition.
Required: Determine the amount of gross profit recognized for each year from 2013 through 2016.
Required: Purpose all journal entries to record costs, billings, collections, and profit recognition for 2013 through 2016
Required: Determine and provide the balance sheet amount (properly classified and labeled) for the contract accounting specific accounts only at each 31st December from 2013 through 2016.
Scenario 2 - Consider that URS uses the completed contract technique for revenue recognition.
Required: Evaluate the amount of gross profit recognized by URS throughout each year from 2013 through 2016.