19 May QuestionExercise 5-1On June 1, 2011, the Luttman and Dowd
Question
Exercise 5-1
On June 1, 2011, the Luttman and Dowd Company sold inventory to the Ushman Corporation for $400,000. Terms of the sale called for a down payment of $100,000 and four annual installments of $75,000 due on each June 1, beginning June 1, 2012. Each installment also will include interest on the unpaid balance applying an appropriate interest rate. The inventory cost Foster $150,000. The company uses the perpetual inventory system.
Required:
1. Compute the amount of gross profit to be recognized from the installment sale in 2011, 2012, 2013, 2014, and 2015 using point of delivery revenue recognition. Ignore interest charges.
2. Repeat requirement 1 applying the installment sales method.
3. Repeat requirement 1 applying the cost recovery method.
Exercise 5-2
The Ugenti Construction Company contracted to construct a warehouse building for $2,600,000. Construction began in 2011 and was completed in 2012. Data relating to the contract are summarized below:
2011 2012
Costs incurred during the year…………………………… $ 360,000 $1,650,000
Estimated costs to complete as of 12/31…………… 1,560,000 –
Billings during the year ……………………………………… 430,000 2,170,000
Cash collections during the year………………………… 320,000 2,280,000
Required:
1. Compute the amount of gross profit or loss to be recognized in 2011 and 2012 using the percentage-of-completion method.
2. Compute the amount of gross profit or loss to be recognized in 2011 and 2012 using the completed contract method.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2011 using the percentage-of completion method.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2011 using the completed contract method.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.