Su06Ch18_Solutions

Su06Ch18_Solutions - Chapter 18: Revenue Recognition...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 18: Revenue Recognition Homework Solutions EXERCISE 18-5 (10-15 minutes) (a) Contract billings to date $61,500 Less accounts receivable 12/31/04 21,500 Portion of contract billings collected $40,000 $18,200 (b) $65,000 = 28% (The ratio of gross profit to revenue recognized in 2004.) $1,000,000 X .28 = $280,000 (The initial estimated total gross profit before tax on the contract.) EXERCISE 18-11 (15-20 minutes) (a) Computation of gross profit recognized: 2004 2005 $370,000 X 30%* $111,000 $350,000 X 30%* $105,000 $475,000 X 32%** ______________ 152,000 $111,000 $257,000 * *($900,000 – $630,000) ÷ $900,000 **($1,000,000 – $680,000) ÷ $1,000,000 (b) Installment Accounts Receivable—2005. .................................................. 1,000,000 Installment Sales. ............................................................................ 1,000,000 Cost of Installment Sales. ........................................................................... 680,000 Inventory . ........................................................................................ 680,000 Cash . ............................................................................................ 825,000 Installment Accounts Receivable— 2004. ............................................................................................. 350,000 Installment Accounts Receivable— 2005. ............................................................................................. 475,000 Installment Sales. ........................................................................................ 1,000,000 Cost of Installment Sales. ............................................................... 680,000 Deferred Gross Profit on Installment Sales—2005. ................................................................................. 320,000 Deferred Gross Profit on Installment Sales—2004 . .............................................................................................. 105,000 Deferred Gross Profit on Installment Sales—2005 . ............................................................................................ 152,000 Realized Gross Profit on Installment Sales . ............................................................................................ 257,000 Realized Gross Profit on Installment Sales . ........................................................................................................ 257,000 Income Summary. ........................................................................... 257,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 18: Revenue Recognition Homework Solutions EXERCISE 18-12 (15-20 minutes) (a) Deferred Gross Profit—2004. .................................................................... 3,150* Deferred Gross Profit—2005. .................................................................... 12,400** Deferred Gross Profit—2006. .................................................................... 69,400*** Realized Gross Profit. ..................................................................... 84,950
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 14

Su06Ch18_Solutions - Chapter 18: Revenue Recognition...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online