115. Assume that a firm uses the accrual basis of accounting. For each of the following independent cases, indicate the amount of revenue the firm recognizes for the month of August.
a.
Collects $2,000 in July for merchandise to be delivered in August.
b.
Collects $1,200 in May for subscriptions that will be delivered during the next twelve months (beginning in May).
c.
Collects $800 in August for merchandise sold and delivered in July.
d.
Collects $2,400 interest on a 6-month certificate of deposit, which matures on August 15th.
e.
Sells $3,000 of merchandise on account in August. The firm allows a 2% discount for payment prior to 30 days and customers take the discount.
116. The life of a construction contract is 4 years. The firm used the percentage-of-completion method. Under this method, cash collected and revenues recognized are shown below. Total cost of the project was $800,000. What portion of the total cost was incurred each year?
Cash
Revenue
Cost
1
$ 100,000
$ 300,000
A
2
200,000
300,000
B
3
150,000
C
4
Total
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