Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Recognising revenue on long-term contracts II*
Early in x4 Hephaestus Construction Company was awarded a three-year contract by the French and Spanish governments to build a road tunnel through the Pyrenees. The value of the contract was 5,100. (All amounts are in millions of euros.) The tunnel was completed on schedule by late x6. Information about costs incurred, billings made and payments received is set out below:
(In millions)
Cumulative costs incurred
x4
1,000
x5
2,520
x6
4,100
Costs to be incurred (estimated at year-end)
3,000
1,680
-
Progress billings in year
1,500
2,600
Progress payments received in year
900
1,400
2,000
Required
(a) Compute the profit or loss Hephaestus recognises on the contract each year in x4, x5 and x6 under:
(i) the percentage-of-completion (POC) method (assume 'costs incurred' approximate work completed);
(ii) the completed contract method.
(b) Show the effect of this contract on the company's x4-x6 balance sheets under each revenue recognition method. Assume all costs incurred are paid in cash in the year.
State that the discount rate could take into account inflation and risk. How would that work in practice. How would you come to a specific discount rate if you are the management accountant that has to evaluate an investment proposal?
Beta plc has been trading for twelve years and during this period has achieved a good profit record. To date, the company has not been listed on a recognised stock exchange. However, Beta plc has recently appointed a new chairman and managing dire..
your grandparents have been left a substantial amount of money and want to invest in a company. your grandfather trusts
computation of dividend growth rate for johnson and johnson jnj employing log-linear regressionthis is a project
choose the correct answers and complete the statements.a while evaluating capital investment proposals the time value
How will the current balance-of-payments position of the country affect its equity and debt markets in the short term?
Employees in Dept. R are paid total salaries of £24,000 per annum and complete timesheets to account for their time. Departments M, A, F and D utilise its services in the ratio 70:20:8:2 respectively.
read carefully the case notes overleaf. consider the information shown in the appendix.determine how this information
Why does Helping Hand deduct an amount for goodwill in arriving at US GAAP income but add a much larger amount under the same heading in arriving at US GAAP shareholders' equity?
The City of Carefree voted to establish an internal service amount to account for its printing services. The City transferred $500,000 cash from General Fund to the newly created internal service amount.
A firm is considering to invest $75,000 in a personnel training program. The $75000 outlay will be charged off as an expense by the firm this year.
How certain features (characteristics) of bonds affect their risk and hence return. Also discuss the usefulness and limitations of bonds ratings. How would these factors change your investment strategy when looking at bonds?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd