Installment sales2012 120000 accounts receivable2012

Info icon This preview shows pages 48–50. Sign up to view the full content.

View Full Document Right Arrow Icon
Installment sales—2012 $120,000 Accounts receivable—2012 (90,000 ) Cash collected $ 30,000 (d) Total realized gross profit in 2012 From 2010 $28,000 × 25% = $ 7,000 2011 $60,000 × 24% = 14,400 2012 $30,000 × 35% = 10,500 $31,900 *Excluding accounts receivable for repossessed merchandise. 18 - 48
Image of page 48

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

View Full Document Right Arrow Icon
Revenue Recognition IFRS QUESTIONS True/False 1. The International Accounting Standards Board (IASB) defines revenue to include both revenues and gains. 2. iGAAP bases revenue recognition on the concepts of “earned” and “realized or realizable.” 3. iGAAP prohibits use of the percentage-of-completion method of accounting for long-term construction contracts. 4. iGAAP requires immediate recognition of a loss if the overall contract is going to be unprofitable. 5. Terry Company is unable to reliably estimate revenues and costs associated with its only long- term construction contract. Under iGAAP, Terry Company must use the completed-contract method to account for this contract. Answers to True/False: 1. True 2. False 3. False 4. True 5. False Multiple Choice 1. The joint project of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) related to revenue recognition includes I. Evaluating a “customer-consideration” model II. Eliminating inconsistencies in the existing conceptual guidance III. Establishing a single, comprehensive standard 2. Belgium Co. is constructing a tunnel for $800 million. Construction began in 2009 and is estimated to be completed in 2014. At December 31, 2011, Belgium has incurred costs totaling $356 million with $85 million of that incurred in 2011, $143 million in 2010, and the remainder during 2009. Belgium believes that it completed 30% of the tunnel during 2011, although that may change based on future activity. Belgium Co. uses iGAAP for its accounting and regards its cost numbers as very uncertain. What amount of revenue should Belgium Co. recognize for the year ended December 31, 2011? 18 - 49
Image of page 49
3. Portugal, Inc. has the following amounts related to its activities for the year ended December 31, 2011: Sales to customers $5,000,000 Gain on sale of equipment $ 360,000 Gain on sale of investments $ 760,000 Loss on sale of land $ 240,000 Portugal, Inc. uses iGAAP for its external financial reporting. How much revenue should Portugal, Inc. report on its income statement for the year ended December 31, 2011?
Image of page 50
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern