Assignment 4 - Assignmnt PDF

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Summary

Assignmnt...

Description

Navkiran Marok 66038852 Journal Entries 2017 Cost of Construction Construction in progress Cash, Payables

180,000

Progress Billing Account Receivable Billing on Contract

153,000

Collection on Billing Cash Account Receivables

140,000

180,000

153,000

140,000

Recognition of Income Cost of Construction 180,000 Construction in Progress Inventory 36,645 Construction Revenue (22% of 975,000) Percentage completed= (180,000/180,000+630,000) *100= 22.22%

216,645

2018 Cost of Construction Construction in progress

450,000

Cash, Payables

450,000

Progress Billing Account Receivable

382,500

Billing on Contract(535,500- 153,000)

382,500

Collection on Billing Cash

235,000

Account Receivables

235,000

Recognition of Income Cost of Construction

450,000

Construction in Progress Inventory

82,448

Construction Revenue Percentage of Completion= (180,000+450,000/180,000+450,000+190,000) *100= 76.83%

532,448

Construction Revenue= 76.83% of 975,000=749,093-216,645=532,448

2019 Cost of Construction Construction in progress Cash, Payables

195,000 195,000

Progress Billing Account Receivable 439,500 Billing on Contract (975,000- 535,000) Collection on Billing Cash 75,000 Account Receivables (450,000- 375,000) Recognition of Income Cost of Construction 195,000 Construction in Progress Inventory 30,907 Construction Revenue Percentage of completion= (180,000+450,000+190,000)/ (180,000+450,000+190,000) *100

439,500

75,000

225,907

100% Construction Revenue=975,000- 216,645- 532,448= 225,907 Billing on Contract Construction in Progress Inventory

975,000 975,000

Required 2 Accounts Receivable

2017 13,000

2018 147,500

2019 364,500

CIP Inventory Billings on Contract Cost in excess of Billings

36,645 153,000 63,645

82,448 535,500 213,593

0 0 0

Construction Revenue Costs of Construction Gross Profit

216,645 180,000 36,645

532,448 450,000 82,448

225,908 195,000 30,907

Required 3 Management of RCL can show less expected cost in the beginning years of contract that will result in greater percentage of contract completed that will result in greater percentage of revenue recognition in first few years and will increase the net income.

Required 4

Cost of Construction Construction in progress Cash, Payables

450,000 450,000

Progress Billing Account Receivable Billing on Contract (535,000-153,000) Collection on Billing Cash Account Receivables (375,000-140,000) Recognition of Income Cost of Construction Construction in Progress Inventory Construction Revenue

382,500 382,500

235,000 235,000

450,000 75,990 374,010

Percentage of completion= (180,000+450,000)/ (180,000+450,000+410,000) *100 60.58% * 975,000= 590,655-216,645= 374,010

% of completion 590,655

CIP Inventory

Completed Contract 0

Revenue

374,010

384,345

Income (Loss) before income taxes

(75,990)

150,000

1. Required 1 JE Accounts Receivable/Cash

14,000

Sales Revenue Cost of goods Sold

14,000 9,000

Inventory Deferred Warranty Costs Warranty Liability

9,000 420 420

Required 2 Performance Obligation Hot Tub Extended Warranty

Accounts Receivable

Stand alone SP 14,000

90.32%

13,548

1,500

9.68%

1,452

15,500

100%

15,000

15,000

Sales Revenue

13,548

Deferred Revenue Cost of Goods Sold

1,452 9,000

Inventory Deferred Warranty Costs Warranty Liability (14,000* 3%)

Transaction Price

9,000 420 420...