1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ksenya-84 [330]
3 years ago
11

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,650,000. The project began in 2021 a

nd was completed in 2022. Data relating to the contract are summarized below:
2021 2022
Costs incurred during the year $ 352,000 $ 2,025,000
Estimated costs to complete as of 12/31 1,408,000 0
Billings during the year 470,000 1,750,000
Cash collections during the year 405,000 1,815,000

Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.
Business
1 answer:
nata0808 [166]3 years ago
8 0

Answer:

Multiple Answers

Explanation:

1. Over Time

a) Begin w/ Percentage of Revenue Method:

Actual Costs to Date / Estimated Total Costs = % Complete to Date

2021:

$352,000 / ($352,000 + $1,408,000) =

$352,000 / $1,760,000 = 20%

2022:

($352,000 + $2,025,000) / ($352,000 + $2,025,000)

$2,377,000 / $2,377,000 = 100%

b)

2021:

Construction Revenue: (20% * $2,650,000) = $530,000

Less: Construction Expenses: $352,000

Gross Profit: $178,000

c)

2022 (subtract out 2021 costs):

Construction Revenue: $2,650,000 - $530,000 = $2,120,000

Less: Construction Expenses: $2,377,000 - $352,000 = $2,025,000

Gross Profit: $273,000 - $178,000 = $95,000

2.  Upon Completion:

2021:

Revenue: $0

Gross Profit: $0

2022:

Revenue: $2,650,000

Gross Profit: $273,000

3. Over Time:

Current Assets:

   A/R: $470,000 - $405,000 = $65,000

   Costs & Profits in Excess of Billings:  $530,000 - $470,000 = $60,000

4. Upon Completion:

Current Assets:

     A/R: $470,000 - $405,000 = $65,000

Current Liabilities:

    Billings in Excess of Profit & Cash: $470,000 - $352,000 = $118,000

You might be interested in
The _____ frame of an organization focuses on providing harmony between the needs of the organization and the needs of people.
earnstyle [38]

Answer:

The correct answer is: human resources.

Explanation:

The Human Resources (<em>HR</em>) department is in charge of recruiting and selecting new personnel with the characteristics and profile the organization is looking for. Besides, the HR role is to provide employees the sources necessary so they can perform their duties in a proper environment within the firm.

3 0
3 years ago
1. What kind of financial information is a publicly traded company required to provide to its stockholders? Which financial stat
qwelly [4]

Answer:

1. For a public traded company it is required to share its complete set of Financial Statements which include Balance sheet, Profit or loss statement, Cash flow statement, statement of changes in equity and notes to the accounts. For investors the best information comes from Profit or Loss statement because majority of investors are concerned with the profitability of the company which ultimately results in dividend.

2. a. The ratios analysis have some limitations, the ratios are generally compared with past year ratios which neglects the business/ Industry environment and if the ratios are compared with industry norms, past performance of the company is neglected.

b. Profitability ratios are the most important and that is why they are calculated first.

3. Net Cash flow for Crooked Golf is $30,000

Explanation:

1. For a public traded company it is required to share its complete set of Financial Statements which include Balance sheet, Profit or loss statement, Cash flow statement, statement of changes in equity and notes to the accounts. For investors the best information comes from Profit or Loss statement because majority of investors are concerned with the profitability of the company which ultimately results in dividend.

2. a. The ratios analysis have some limitations, the ratios are generally compared with past year ratios which neglects the business/ Industry environment and if the ratios are compared with industry norms, past performance of the company is neglected.

b. Profitability ratios are the most important and that is why they are calculated first.

3. Net Csh flow for Crooked Golf is $30,000.

Calculated as follow,

$90,000 - $60,000

Depreciation is non Cash flow.

4 0
2 years ago
Option 4: Threats Based on your own experiences shopping at Target and Walmart and the research you conducted: Identify 1-2 poss
Makovka662 [10]

Answer:

File is attached below

Explanation:

Download txt
6 0
3 years ago
An authorization to start a business issued by the local government is a _____. fringe benefit zoning law business license liabi
Rina8888 [55]

An authorization to start a business issued by the local government is a business license. A business license allows a person to run a business legally. The license is used for tax purposes with the government and so the government can control and regulate the business on the legal side. If you do not have a business license, then you are a sole proprietor and running the business for tax purposes from your social security number.

5 0
2 years ago
How would a good recordkeeping system help during a tax audit?
cricket20 [7]
It would help keep the person organized
6 0
2 years ago
Read 2 more answers
Other questions:
  • Sheryl’s Shipping had sales last year of $10,000. The cost of goods sold was $6,500, general and administrative expenses were $1
    7·1 answer
  • How do you calculate net gdp
    11·1 answer
  • The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for custo
    6·1 answer
  • A new mall will be constructed in a large city. Why are business owners most likely viewing a topography map before construction
    5·1 answer
  • Data concerning Pony Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 200 100 % Variable exp
    6·1 answer
  • A team's attempt to list, on individual sticky notes, all of the possible threats and opportunities that could occur to an upcom
    9·1 answer
  • When referring to student loans, what is a grace period? A)The time period between graduating college and starting your first jo
    7·1 answer
  • Which of the following statements is true of control? Control through rules, procedures, and budgets is generally not very costl
    13·1 answer
  • Write the message you would speak when leaving a phone message at your dentist's office, asking for an appointment to get your t
    11·2 answers
  • Analyze Johnson Stores’ staffing budget for holidaysJohnson Stores is planning its staffing for the upcoming holiday season. Fro
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!