CFRHW2 Sol - 10,000t = 40,000(800,000 – t 50,000t =...

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CFR HW #2 E 3-2, 3-4 ; P 3-5 ; E 4-7, 4-8 E 3-2 1,800,000 / (1,800,000 + 600,000) = 0.75 Estimated Profit on Contract: 3,000,000 – 2,400,000 = 600,000 Estimated Profit Earned to Date: 0.75 * 600,000 = 450,000 Incremental Profit: 450,000 – Profit recognized in previous years = 450,000 – 300,000 = 150,000 E 3-4 2007: 0.3*(600k-200k-100k-50k-150k) = 30,000 2008: 0.4*(900k-300k-50k) = 220,000 Deferred Gross Profit = 220,000 + 30,000 = 250,000 P 3-5 a) To record customer billings: A/R 47,000 Contract Billings 47,000 To record cash collected: Cash 32,000 A/R 32,000 To record ending A/R A/R 15,000 Contract Billings 15,000 b) costs incurred = construction in progress – profits =50,000 – 10,000 = 40,000 let's say initial estimated total costs = t 40,000 / t = profits / (800,000-t)

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Unformatted text preview: 10,000t = 40,000 (800,000 – t) 50,000t = 32,000,000,000 total estimated costs = \$640,000 c) estimated total income (before taxes) = \$800,000 - \$640,000 = \$160,000 E 4-7 Cash Flow from Operations: Cash Received from Customers \$870,000 Cash Paid to Suppliers & Employees (\$510,000) Cash Paid for Taxes (\$110,000) Cash Received from Rent 10,000 ___________________________________________________ CF from Operations: \$260,000 E 4-8 In May: May credit sales collection (20%) : 200,000*0.2 = 40,000 April credit sales collection (70%) : 150,000*0.7=105,000 Prior to April credit sales collection: 12,000 Total: 40,000 + 105,000 + 12,000 = 157,000 = Estimated Cash Collections...
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CFRHW2 Sol - 10,000t = 40,000(800,000 – t 50,000t =...

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