136C 1_11_11 Notes

136C 1_11_11 Notes - 136C Notes: 1/11/11 *Review effective...

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**Review effective interest method. Romeo **Pick up AS notes and reader 206291 ASAP Office hours: T 6-7, R 5-6…. NH3015 -------------------------------------------- Back to problem 18-7 1 2 3 Contract price 1,200,000 1,200,000 1,200,000 *Using completed contract method (2) Total costs 800,000 1,300,000 785,000 400,000 -100,000 415,000 *Must use 100 percent rule because the 35% 100% 100% whole project was a loss 140,000 -100,000 >>Recognize loss upon it being clear -140,000 *Must recognize the whole loss. -240,000 *Last year you reported a 140,000+ so now report a 240,000 loss. 2 3 1,200,000 1,200,000 600+500 >> 1,100,000 1,100,000 *100% rule wont kick in here. 600=coststo date 100,000 100,000 *When you see a negative number on 500=costs left 55% 100% this line, will use the 100% rule b.c its 55,000 100,000 a loss. -140,000 -55,000 -85,000 45,000 2 3 1,200,000 1,200,000 1,300,000 1,300,000 -100,000 -100,000 100% 100% -100,000 -100,000 -140,000 -100,000 *Already recorded this loss -240,000 0 Balance Sheet *When we spend money we debit the CIP and credit A/P 1st year 2nd year CIP 280k 320 AP 280k 320 AR 150k 350 Billings
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136C 1_11_11 Notes - 136C Notes: 1/11/11 *Review effective...

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