+1-415-670-9189
info@expertsmind.com
Pankratov lakes is a new recreational real estate
Course:- Accounting Basics
Reference No.:- EM13601432




Assignment Help
Assignment Help >> Accounting Basics

Pankratov Lakes is a new recreational real estate development which consists of 500 lake-front and lake-view lots. As a special incentive to the first 100 buyers of lake-view lots, the developer is offering 3 years of free financing on 10-year, 12% notes, no down payment, and one week at a nearby established resort  "a $1200 value." The normal price per lot is $12,000. The cost per lake-view lot to the developer is an estimated average of $2,000. The development costs continue to be incurred; the actual average cost per lot is not known at this time. The resort promotion cost is $700 per lot. The notes are held by Davis Corp., a wholly owned subsidiary.

a. Discuss the revenue recognition and gross profit measurement issues raised by this situation.

b. How would the developer's past financial and business experience influence your decision concerning the recording of these transactions?

c. Assume 50 persons have accepted the offer, signed 10-year notes, and have stayed at the local resort. Prepare the journal entries that you believe are proper.

d. What should be disclosed in the notes to the financial statements?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Access the glossary (Master Glossary) to answer the following.(a) What does the term "callable obligation" mean?(b) What is an imputed interest rate?(c) What is a long-term ob
During the period, labor costs incurred on account amounted to $250,000 including $200,000 for production orders and $50,000 for general factory use. In addition, factory ov
1. How do audits of governmental agencies differ from those of not-for-profit entities? How are these audits different from those of organizations that operate for profit?
The management of Harrigill Corporation would like to have a better understanding of the behavior of its inspection costs. The company has provided the following data:
Use the partnership and corporate tax returns for the practice sets titled, "Pet Kingdom" and "ROCK the Ages, LLC" that you prepared in Weeks 3 and 5 in order to complete th
The appraised value of the property is 490,000 and of the warehouse is 980000. Prepare the entry by cheng for the receipts of the properties.
In the F C case, inventory manipulation was used to enact the fraud. Discuss how accounting firms should modify their audit procedures to ensure the risk of financial fraud is
Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities.