Prepare general journal entries to record the transactions
Course:- Financial Accounting
Reference No.:- EM13394

Assignment Help
Assignment Help >> Financial Accounting

A company enters into a four year service contract at a contracted price of $12,000,000 on December 31, 20x0. At that time it was estimated that the total contract costs would amount to $10,000,000.

Data relating to the contract over its four years are as follows:

                                                             20x1         20x2           20x3          20x4

Costs incurred during year                      $1,800,000  $2,400,000  $4,425,000  $2,600,000

Expected costs to complete  contract       8,200,000   6,300,000    2,875,000        -0-

Required - 
For each the four years, Evaluate the amount of revenues and profit/loss that will be realized.

Question 2
Write the journal entries for each of the subsequent transactions: 
June 2    Sold 200 unit of product A605 to Chancellor Industries for $30 each. Terms 1/10, n40
June 4    Chancellor Industries returned 35 units. The units were restocked.
June 11  Received a cheque from Chancellor for payment of the June 2 sale.
June 14  Sold 500 units of product A505 to Newman Industries for $75 each. Terms 1/10, n40.
June 18  Newman Industries informs us that some of the items sold on June 14 are  damaged. They will keep the items but are requesting a credit note. After inspecting the units, a credit note of $5,000 is issued.

July 27    A cheque is received from Newman Industries.

Question 3

Simmons Company engaged in the following transactions in July.

July 1 Sold merchandise to Bernice Wilson on credit, terms 2/10, n/30, FOB shipping point, $2,100 (cost, $1,260).

July 3 Purchased merchandise on credit from Simic Company, terms n/30, FOB shipping point, $3,800.

July 4 Accepted for full credit a return from Bernice Wilson and returned merchandise to inventory, $200 (cost, $120).

July 5 Paid Banner Freight for freight charges on merchandise received, $290.

July 6 Purchased merchandise on credit from Hayes Supply Company, terms n/20, $636.

July 8 Purchased merchandise on credit from Salinas Company, terms n/30, FOB shipping point, $3,600, which includes $200 freight costs paid by Salinas Company.

July 9 Received payment from Bernice Wilson (July 1 purchase)

July 12 Returned some of the merchandise received on July 3 for credit, $600.

July 16 Received a $100 credit memo for the  July 6 purchase for minor defects.

The merchandise was not returned.

July 17 Sold merchandise for cash, $1,000 (cost, $600).
July 24 Paid Simic Company for purchase of July 3. 
Required - 

1. Prepare general journal entries to record the transactions, assuming use of the periodic inventory system.

2. Prepare general journal entries to record the transactions, assuming use of the perpetual inventory system.

Ask Question & Get Answers from Experts
Browse some more (Financial Accounting) Materials
Western Fabrics manufacturers a specialty monogrammed blanket. The following are the cost and labor standards for this blanket: What is the standard direct material cost for o
How can Elmo's change its reward system to have John consistently make decisions which are consistent with top management's wishes? Which product will John choose? Why?
Equity increased by $800,000 during the year including net income of $600,000 and other comprehensive loss of ($150,000). The company had no stock transactions during the year
What is the forecasted addition to retained earnings for 2010? A budget is a formal written statement of management's strategies for the future expressed in financial terms
Prepare in good form a multiple-step income statement for the year 2011. Assume a 30% tax rate and that 100,000 shares of common stock were outstanding during the year.
Investigate how the concepts of dividend policy, cost of capital, and other aspects of corporate financial management theory learned in this course affect the financial prof
Tallahassee Seminole Shop uses the percentage of receivables method of accounting for uncollectible accounts. Estimate the uncollectible accounts as of the end of 20-9. Prepar
Describe for the students the primary objectives of accounting. Explain basic terminology of the accounting process or financial reporting.