Chapter 18p-5

Chapter 18p-5 - Name: Problem: P18-5, Completed Contract...

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Problem 18-5, Page 1 of 3, 07/28/2011, 07:03:11 Name: Problem: Course: Date: BLUESTEM TRACTOR PLANT Contract price $8,000,000 2010 2011 2012 Estimated costs $1,600,000 $2,880,000 $1,920,000 Progress billings 1,000,000 2,500,000 4,500,000 Cash collections 800,000 2,300,000 4,900,000 Instructions: Enter text answer here as appropriate. P18-5, Completed Contract and Percentage of Completion with Interim Loss Reynolds Custom Builders (RCB) was established in 1985 by Avery Conway and initially built high-quality customized homes under contract with specific buyers. In the 1990s, Conway’s two sons joined the company and expanded RCB’s activities into the high-rise apartment and industrial plant markets. Upon the retirement of RCB’s long-time financial manager, Conway’s sons recently hired Ed Borke as controller for RCB. Borke, a former college friend of Conway’s sons, has been associated with a public accounting firm for the last 6 years. Upon reviewing RCB’s accounting practices, Borke observed that RCB followed the completed contract method of revenue recognition, a carryover from the years when individual home building was the majority of RCB’s operations. Several years ago, the predominant portion of RCB’s activities shifted to the high-rise
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This note was uploaded on 07/27/2011 for the course ACCT 102 taught by Professor Huxhold during the Spring '11 term at UCSD.

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Chapter 18p-5 - Name: Problem: P18-5, Completed Contract...

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