Compute the revenue and expense for each four years

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Reference no: EM131524192

Question 1 -

Free Form Builders Inc., a construction company, recognizes revenue from its long-term contracts using the percentage-of-completion method. On March 29, 2017, the company signed a contract to construct a building for $600,000. The company estimated that it would take four years to complete the contract and estimated the cost to the company at $425,000 - the expected costs in each of the four years are as follows:

Year

Cost

2017

$110,750

2018

$100,500

2019

$184,250

2020

$29,500

Total

$425,000

Prior to closing its books for the year ended December 31, 2018, management revised its estimates for the costs in 2019 and 2020. It estimated that it would cost $300,000 in 2019 and $100,000 in 2020 to complete the contract.

Required: Compute the revenue, expense, and profit/loss for each of the four years. Assume that actual costs incurred each year were the same as expected/estimated/revised costs.

Question 2 -

The following information relates to the Investments at fair value through Profit and Loss (FVTPL) of Anders Corp.

Security

Acquisition Date

Acquisition Cost

Date Sold

Selling Price

Market Value Dec. 31

2016

2017

2018

Alpha

Apr. 31, 2016

$60,000

NA

NA

$68,000

$72,000

$69,000

Beta

Aug. 24, 2016

45,000

May 27, 2017

62,000

48,000

NA

NA

Delta

Jan. 8, 2017

35,000

NA

NA

NA

38,000

41,000

Omega

Jan. 3, 2018

95,000

June 30, 2018

100,000

NA

NA

NA

The Anders Corp. closes its books on December 31 each year.

["NA" means not applicable.]

Required:

a. Prepare journal entries relating to these Investments at fair value through Profit and Loss (FVTPL) for each year. (There are NO brokerage fees.)

b. Show how the information regarding Investments at fair value through Profit and Loss (FVTPL) would be presented on the income statement and balance sheet for each year.

Attachment:- Assignment and Template.rar

Reference no: EM131524192

Reviews

len1524192

6/9/2017 5:32:58 AM

Please use the attached templates in presenting your answers. These responses do not have to be typed. Find the question attached. Show how the information regarding Investments at fair value through Profit and Loss (FVTPL) would be presented on the income statement and balance sheet for each year.

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