View the step-by-step solution to:

(TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info from the project accountant:

This question was answered on Jan 17, 2013. View the Answer
1. (TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info from the project accountant:
Total Construction Fixed Price $8,000,000
Construction Start Date March 3, 2012
Construction Complete Date December 4, 2013
As of Dec 31… 2012 2013
Actual cost incurred $2,500,000 $3,150,000
Estimated remaining costs $3,750,000 $-
Billed to customer $2,400,000 $5,300,000
Received from customer $2,250,000 $5,400,000
Assuming Platypus Building Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013?
1. $2,000,000
2. $2,350,000
3. $1,650,000
4. $940,000
2. (TCO A) Kerry Corp purchased a used bottling machine from Bob's Bottling Inc. on Jan 1, 2012 for $2100000. Bob accounted for the sale correctly under the installment sales method. It had a book value of $1575000. Kerry paid with $300000 cash and a note for $1800000 with an annual interest of 10%. Kerry agreed to make equal annual payments of $600000. Kerry Corp made their first payment on Jan 1, 2013 of $780000 which included interest of $180000 to date of payment.
As of Dec 31, 2013 Bob has deferred gross profit of ?
1. $255,000
2. $330,000
3. $375,000
4. $300,000
3. (TCO A) Blue Suede Construction Corp used the percentage-of-completion method of revenue recognition. They were contracted to build the new amphitheater for $800000. Additional information was provided:
As of Dec 31…. 2012 2013
Percentage of completion 15% 40%
Estimated total expected costs $550,000 $580,000
Gross profit recognized (Cumulative) $50,000 $99,000
Contracted costs incurred during 2013 were… (Points : 5)
1. $145,000
2. $149,500
3. $151,000
4. $232,000
4. (TCO A) In industries with high rates of return (such as a magazine distribution company) an alternative method of revenue recognition would be
• record sales net of an estimate of expected future returns
• record sales in current period and returns in future periods as they occur
• do not record any sales until expiration of all return privileges have passed
• all of the above
Sign up to view the entire interaction

Top Answer

Hi Enclosed please find the solution... View the full answer

8420944_Solution.docx

1. (TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info
from the project accountant:
Total Construction Fixed Price
$8,000,000
Construction Start Date
March 3,...

This question was asked on Jan 16, 2013 and answered on Jan 17, 2013.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • -

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards