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Describe the effects on a company's financial statements of recognizing revenue at the time of sale, during production, and at the time of cash receipt.
Under what circumstances does a company recognize revenue prior to the period of sale? What two methods may it use?
How may the departure from the principle of recognizing revenue only at the time of the sale be justified when a company uses the percentage-of-completion .
How does a company account for losses under the two methods of accounting for long-term construction contracts?
How does a company recognize initial direct costs, direct costs, and indirect costs as expenses under the proportional performance method?
Under what circumstances does a company recognize revenue after the period of the sale? What two methods are used?
If a motion picture company wanted to find specific guidance on how to recognize revenue related to its film licensing rights.
Distinguish between the initial franchise fee and continuing franchise fee. When is each recognized as revenue?
In a consignment, does the consignee or consignor retain title to the property? When is revenue recognized by the consignor?
Assume that the company has not yet delivered the item to its customer, but advances the recognition of revenue to the period of production.
The company contracts to produce and sell an item of inventory to a customer for $250. It costs $150 cash to manufacture the item.
Prepare a schedule to determine the amount of loss that Wells Corporation should recognize for the current year.
Lark Corporation uses the percentage-of-completion method of accounting for construction contracts.
Assume Berry collected $150,000 in receipts from the sale of memberships.
Prepare the journal entries to record the sale of the land and the first $40,000 receipt.
Which method provides the most useful information to users? Under what circumstances would the other methods provide more useful information?
Prepare a schedule showing the amount of gross profit that Tarlo Company recognizes each year using the percentage-of-completion method.
The contract price is $4,000,000, and the company uses the percentage-of-completion method.
Prepare schedules to compute the amount of gross profit to be recognized for the year ended December 31, 2010 and the amount .
At what value is the inventory of the company carried after the delivery of the 80,000 bushels? Why?
How should the company compute the depreciation of its office building and office equipment that would be included in the preceding costs?
If the company collected $45,000 in 2011 on its 2010 installment method sales, prepare the appropriate journal entries in 2011.
In 2010, the Huxley Company, a real estate company, purchased some raw land for $60,000 and resold it on credit for $90,000.
The sale agreement is contingent on the commitment by the city government to support redevelopment of the area in which the building is located.
Payments received by a producer for films that are licensed to movie theaters for two years, after which the rights are licensed to television networks.