Reference no: EM132709213
Question - Please answer the following question - Income recognition for a contractor. On October 15, 2010, Flanikin Construction Company contracted to build a shopping center at a contract price of $180 million. The schedule of expected and actual cash collections and contract costs is as follows:
|
Year
|
Cash Collections from Customers
|
Estimated and Actual Cost Incurred
|
|
2010
|
$36,000,000
|
$12,000,000
|
|
2011
|
45,000,000
|
36,000,000
|
|
2012
|
45,000,000
|
48,000,000
|
|
2013
|
54,000,000
|
24,000,000
|
|
|
180,000,000
|
$120,000,000
|
Required -
a. Calculate the amount of revenue, expense, and net income for each of the four years under the following revenue recognition methods:
(1) Percentage-of-completion method.
(2) Completed contract method.
b. Show the journal entries Flanikin will make in 2010, 2011, 2012, and 2013 for this contract. Flanikin accumulates contract costs in a Contract in Process account. Although the costs involve a mixture of cash payments, credits to assets, and credits to liability accounts, assume for purposes of this problem that all costs are recorded as credits to Accounts Payable.
c. Which method do you believe provides the better measure of Flanikin Construction Company's performance under the contract? Why?
|
Cyber-attack can cause economic damage
: There are a variety of ways that a cyber-attack can cause economic damage.
|
|
What is popular culture
: What is popular culture? How do people interact with, express, and interpret popular culture? How can we change the way we see popular culture
|
|
What kind of environmental health impacts
: What kinds of inputs (e.g., labor, energy, water, agricultural enhancement) might have contributed to the production of this food?
|
|
Set of vulnerabilities
: If you were given a set of vulnerabilities how would you prioritize remediating them?
|
|
Calculate the amount of revenue and net income
: Calculate the amount of revenue, expense, and net income for each of the four years under the completed contract method
|
|
Negative performance appraisal
: Why is it often very difficult for supervisors in any culture to provide employees with a negative performance appraisal?
|
|
Lucrativeness of company for prospective investment
: As a financial manager of Unilever, make a report to CFO of the company on the lucrativeness of company for prospective investment.
|
|
How would rate attitude to other cultures
: Are you eager to learn about new cultures or are you more cautious when it comes to being around people who appear different? (Openness)
|
|
What is the follow-up
: You are the Front Desk Agent at the Crown Inn and Suites. Mr. Wayne shows up at 4:00pm to check-in to his room, which is not ready despite being
|