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 ...





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




2,000




3




3,000




1,000




4




4,000




1,000















Required:



What is the income before taxes during each of the following periods under each of the specified methods of revenue recognition?






































































a.




1




Completed Contract




b.




4




Completed Contract




c.




1




Percentage of Completion




d.




4




Percentage of Completion




e.




1




Installment Method




f.




4




Installment Method




g.




1




Cost Recovery First




h.




4




Cost Recovery First



















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:























a.




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.




b.




Assume Slotkin Co. closes its books on a monthly basis. Prepare any adjusting journal entries necessary at November 30, Year 1.




c.




Prepare any adjusting journal entries necessary at December 31, Year 1.




















May 15, 2022
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