{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Acc124Exam2Fall2003SOLN(2)

# Acc124Exam2Fall2003SOLN(2) - NAME EXAM#2 FALL 2003...

This preview shows pages 1–4. Sign up to view the full content.

NAME____________________ EXAM #2 FALL 2003 SOLUTIONS EXAM #2 / FALL 2003 / 1

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

View Full Document
NAME____________________ PROBLEM 1 – Investments (20 Points) DATE TRANSACTION DEBIT CREDIT Feb. 14 Investment in AFS Securities \$57,310 Cash \$57,310 1,000 sh * \$55/sh + \$2,310 April 30 Investment in AFS Securities \$20,900 Cash \$20,900 500 sh * \$40/sh + \$900 July 26 No entry Sept. 28 Cash ([email protected]\$68 - \$340) \$6,460 Gain on Sale of AFS Sec. \$1,250 Investment in AFS Sec. \$5,210 \$57,310 / 1,100 sh = \$52.10/sh \$52.10/sh * 100 sh = \$5,210 Oct. 28 Cash \$600 Investment Revenue \$600 Dec. 31 Securities Fair Value Adjustment \$15,000 Unrealized gain on AFS Securities (Equity) \$15,000 Fair Value 1000 @ \$72 + 500 @ \$32 = \$88,000 Cost 1000 @ \$52.10 + \$20,900 = \$73,000 EXAM #2 / FALL 2003 / 2
NAME____________________ PROBLEM 2 – Revenue Recognition (20 Points) Installment Sales Method (10 points) Deferred gross profit = Installment receivable balance * gross profit percentage \$24,000 = 24% of 2004 installment receivables \$24,000 / 24% = \$100,000 \$132,000 = 30% of 2005 installment receivables \$132,000 / 30% = \$440,000 Total installment accounts receivable at 12/31/05 = \$100,000 + \$440,000 = \$540,000 Percentage-of-Completion Method (10 points) A. Costs incurred during 2004 \$7,500,000 * 15% = \$1,125,000 B. Costs incurred during 2005 \$8,000,000 * 45% - \$1,125,000 = \$2,475,000 C. Percentage of completion as of December 31, 2006.

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}