119. A construction firm enters a long-term contract to build a bridge. The expected and actual cash receipts and disbursements for the project are as follows:
1
$1,000
$4,000
2
2,000
3
3,000
1,000
4
4,000
Required:What is the income before taxes during each of the following periods under each of the specified methods of revenue recognition?
a.
Completed Contract
b.
c.
Percentage of Completion
d.
e.
Installment Method
f.
g.
Cost Recovery First
h.
120. List three ways a firm may convert accounts receivable into cash and briefly describe the features of each option.
121. Prepare journal entries for the following transactions:
On November 1, Year 1, Slotkin Co. received a $1,000 note receivable with a 90-day maturity and a 12% interest rate in exchange for an outstanding account receivable of the same face amount.
Assume Slotkin Co. closes its books on a monthly basis. Prepare any adjusting journal entries necessary at November 30, Year 1.
Prepare any adjusting journal entries necessary at December 31, Year 1.
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