nov2class (1) - Calculate the amount of gross profit to be...

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Completion of the Earnings Process over Completion of the Earnings Process over Multiple Reporting Periods Multiple Reporting Periods Percentage-of- Completion Method Percentage-of- Completion Method Long-term Contracts Long-term Contracts Completed Contract Method Completed Contract Method
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Percentage-of-Completion Method Percentage-of-Completion Method Cost incurred to date Gross profit estimate Measuring Progress Toward Completion Estimate of project’s total cost Total costs incurred to date Percent complete = Most recent estimate of total project cost
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What happens when losses occur?
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Long-term Contract Losses Periodic Loss for Profitable Projects Determine periodic loss and record loss in that year’s income statement Loss Projected for Entire Project Estimated loss is fully recognized in the first period the loss is anticipated
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Completed Contract Method Recognizes revenue and gross profit at a point in time when the earnings process is completed, except when project losses are anticipated.
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Calculate the amount of gross profit to be recognized in each of the three years.
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Unformatted text preview: Calculate the amount of gross profit to be recognized in each of the three years. Calculate the amount of gross profit to be recognized in each of the three years. Prepare a partial balance sheet for 2011 and 2012 showing any items related to the contract. Prepare a partial balance sheet for 2011 and 2012 showing any items related to the contract. P 5-6 Complete the requirements assuming that Westgate Construction uses the completed contract method. Calculate the amount of gross profit to be recognized in each of the three years. P 5-6 Complete the requirements assuming that Westgate Construction uses the completed contract method. Prepare a partial balance sheet for 2011 and 2012 showing any items related to the contract. P 5-6 Complete the requirements assuming that Westgate Construction uses the completed contract method. P 5-6 Complete the requirements assuming that Westgate Construction uses the completed contract method....
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This note was uploaded on 11/20/2011 for the course FINANCE 640,722 taught by Professor Chabiyo,reeves during the Fall '11 term at Ohio State.

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nov2class (1) - Calculate the amount of gross profit to be...

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