User Account

All Pages

What amount of revenue is recognized

Assignment Help Cost Accounting
Reference no: EM132880524

Questions -

Q1) In 20x1, Gorgeous Too Co. enters into a fixed-price construction contract with a customer. At contract inception, Gorgeous Too Co. assesses its performance obligations in the contract and concludes that it has a single performance obligation that is satisfied over time. Gorgeous Too Co. determines that the measure of progress that best depicts its performance on the contract is input method based on costs incurred.

Information on the contract follows:

Cumulative contract costs incurred 20x1 -2,250,000 20x2 - 4,800,000

Cumulative profits recognized 20x1 - 750,000 20x2 - 1,200,000

Progress billings 20x1 - 2,400,000 20x2 - 3,600,000

Collections on progress billings 20x1 - 2,000,000 20x2 - 4,000,000

The contract is completed in 20x2.

What amount of revenue is recognized in 20x2?

Q2) In 20x1, ABC Co. was contracted to build a railroad. The contract price is equal to the construction costs incurred plus 20% thereof. However, if the project is completed within 4 years, ABC will receive an additional payment of ?200,000. Information on the project is shown below:

Costs incurred to date 20x1 - 2,400,000 20x2 - 4,575,000 20x3 - 6,125,000

Estimated costs to complete 20x1 - 3,600,000 20x2 - 1,525,000 20x3 - 125,000

In 20x1 and 20x2, it was not highly probable that the project will be completed on time. However, in 20x3, ABC assessed that project will be completed earlier than originally expected and thus it is now highly probable that the incentive payment will be received.

How much profit is recognized on the contract in 20x3?

Q3) ABC Co. started work on a construction contract in 20x1. The contract price is ?10M. However, the contractual agreement stipulates that if the cumulative inflation reaches or exceeds 26%, the contact price shall be adjusted upwards by 10%. Additional information on the contract is shown below:

Costs incurred to date 20x1 - 2,400,000 20x2 - 4,500,000

Estimated costs to complete 20x1 - 3,600,000 20x2 - 1,500,000

Cumulative inflation rate 20x1 - 18% 20x2 - 27%

How much is the profit recognized in 20x2?

Reference no: EM132880524

Questions Cloud

The scarlett case oakmont-associates : On July 25, 2015 Veronica Scarlett got off the phone with the HR department, stressed, frustrated, and albeit uncomfortable at her relatively new job.
How would selling the simpler product affect elmwood profit : Elmwood could sell the simpler product for $65 each. How would selling the simpler product affect Elmwood's profit
How the hr function relates to the hr strategy : State a HR function you, a related policy, and how the HR function relates to the HR strategy.
What is the project payback : Project L costs $65,000, its expected cash inflows are $12,000 per year for 9 years, and its WACC is 9%. What is the project payback
What amount of revenue is recognized : Cumulative contract costs incurred 20x1 -2,250,000 20x2 - 4,800,000. What amount of revenue is recognized in 20x2
What are the arguments for the particular position of latinx : What are the arguments for the particular position of latinx, immigrant, and particularly undocumented women and how they experience violence?
Assigning grocery store employees to cashier positions : All of the following are examples of enriching a job EXCEPT giving daily work station production reports to an assembly line worker.
Discuss in depth the four phases of the training process : 1. Explain how you would conduct a job analysis in a company that has never had job descriptions. Describe in detail the steps in conducting a job analysis and
Calculate the firm weighted average cost of capital : Calculate the? firm's weighted average cost of capital. Explain how the firm can use this cost in the investment? decision-making process

Reviews

Write a Review

Cost Accounting Questions & Answers

  Cost accounting assignment

Evaluate Method of measuring costs associated with production, budgeting process, normal job-order costing system , master budget, cycle time.

  Prepare the journal entries

Prepare the journal entries to record the bond issue and interest expense.

  Advise as to the liability of all the parties

Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.

  Prepare revenues budget

Prepare Revenues budget and Production budget in units

  Effect of exchange rate changes on cash and cash

Effect of exchange rate changes on cash and cash

  Corporate governance

You are to reflect on how this case of China Sky relates to what the arguments for and against allowing audit firm partners and/or employees to join audit committees.

  Cost-benefit analysis

A cost-benefit analysis of electronic medical records in primary care

  Non-annual interest rates and annuities

Theory of Interest- Non-annual interest rates and annuities

  Job costing in service organizations

How is job costing in service organizations different from job costing in manufacturing environments?

  Accounting for bad debt expense

Accounting for bad debt expense

  Accounting and partnership problems

Accounting and Partnership problems

  Development of relevant cash flows

Development of relevant cash flows - Cost estimating and financial analysis

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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