Assignment 3 - Emma OGrady BBUS 3201 Assignment 3 Q 1...

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Emma O’Grady BBUS 3201 Assignment 3 April 25, 2016
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Q 1: Exercise 6-8 A) Cost of Remaining Inventory: 43 x $25,000 = $1,075,000 Cost of Shipping: $5,800 / 80 = $72.50 (per motorcycle) $72.50 x 43 = $3,117.50 (Shipping Costs associated with remaining inventory) Remaining Inventory Amount: $1,075,000 + $3,117.50 = $1,078,117.50 B) Total Sales: 37 x $33,500 = $1,239,500 Cost of Commission: $1,239,500 x 6% = $74,370 Cost of Goods Sold: 37 x $25,000 = $925,000 (Material Cost) $72.50 x 37 = $2,682.50 (Shipping Cost) $925,000 + $2,692.50 = $927,685.50 (Total Cost) Profit for Consigner: $1,239,500 - 74,370 (Commission) - 3,200 (Advertising) - 4,200 (Inspection) $1,157,730 - 927,685.50 (COGS) $230,047.50 C) Remittance to Consignee: $74,370 + 3,200 + 4,200 $81,770
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Q 2: Problem 6-4 A) 2014 2015 2016 Contract Price (A) $9,500,000 $9,500,000 $9,500,000 Costs: Opening Balance Costs incurred during year Costs to Date (B) Estimated Cost to Complete Estimated Total Cost (C) - 3,825,000 3,825,000 4,675,000 8,500,000 3,825,000 4,675,000 8,500,000 1,270,000 9,770,000 8,500,000 1,300,000 9,800,000 - 9,800,000 Estimated Total Gross Profit (A-C) = D 1,000,000 (270,000) (300,000) Percent Complete (B/C) = E 45% 87% 100% Revenue to Date (E*A) Less: previously recognized revenue Revenue for Year (F) 4,275,000 - 4,275,000 8,265,000 (4,275,000) 3,990,000 9,500,000 (8,265,000) 1,235,000 Construction Cost for Year (G) 3,825,000 4,710,000 1,265,000 Gross Profit for Year (F-G) 450,000 (720,000) (30,000) Total Loss on project = $450,000 – 720,000 – 30,000 = $300,000 B) 2014: Dr. Cr. Construction in Process Materials, Cash, Payables, Etc. $3,825,000 $3,825,000 Accounts Receivable Billings on Construction in Progress 3,500,000 3,500,000 Cash Accounts Receivable 3,100,000 3,100,000 Construction Expenses Construction in Process Revenue from long-term contract 3,825,000 450,000 4,275,000
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2015: Dr. Cr. Construction in Process Materials, Cash, Payables, Etc. $4,675,000 $4,675,000 Accounts Receivable (7,600,000 – 3,500,000) Billings on Construction in Progress 4,100,000 4,100,000 Cash (7,250,000 – 3,100,000) Accounts Receivable 4,150,000 4,150,000 Construction Expense Construction in Process Revenue from long-term contract 4,710,000 720,000 3,990,000 2016: Dr. Cr. Construction in Process Materials, Cash, Payables, Etc. $1,300,000 $1,300,000 Accounts Receivable (9,500,000 – 7,600,000) Billings on Construction in Progress 1,900,000 1,900,000 Cash (9,350,000 – 7,250,000) Accounts Receivable 2,100,000 2,100,000 Construction Expense Construction in Progress Revenue from long-term contract 1,265,000 30,000 1,235,000 Billings on Construction Construction in Progress 9,500,000 9,500,000 C) 2014:
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