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Juliette [100K]
3 years ago
10

On February 1, 2020, Marsh Contractors agreed to construct a building at a contract price of $17,400,000. Marsh estimated total

construction costs would be $12,000,000 and the project would be finished in 2022. Information relating to the costs and billings for this contract is as follows: 2020 2021 2022 Total costs incurred to date $4,500,000 $7,920,000 $13,800,000 Estimated costs to complete 7,500,000 5,280,000 -0- Customer billings to date 6,600,000 12,000,000 16,800,000 Collections to date 6,000,000 10,500,000 16,500,000 Required: For percentage-of-completion accounting and for completed-contract accounting, compute the gross profit that should be recorded for 2020, 2021, and 2022. Be sure to show your computations in the answer box and to fill in the correct amounts on a schedule similar to the one below. It is important that you show not only your answers but also your computations!
Business
1 answer:
sammy [17]3 years ago
8 0

Answer:

Check the explanation

Explanation:

Contract price = 17,400,000

Gross profit under percentage of completion method =

[(costs incurred to date / estimated total costs) * estimated profit] - previously recognized profit

Gross profit in 2017 =

[4,500,000 / 12,000,000(4,500,000 + 7,500,000) * 5,400,000(17,400,000 - 12,000,000)] = 2,025,000

Gross profit in 2018 =

[7,920,000 / 13,200,000(7,920,000 + 5,280,000) * 4,200,000(17,400,000 - 13,200,000)] - 2,025,0000 = 495,000

Gross profit in 2019 =

[13,800,000 / 13,800,000 * 3,600,000] - 2,025,000 - 495,000 = 1,080,000

Under the completed contract method Gross profit is recognized only in the year of completion.

Gross profit in 2017 = 0

Gross profit in 2018 = 0

Gross profit in 2019 = 17,400,000 - 13,800,000 = 3,600,000

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3 years ago
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Havermill Co. establishes a $250 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated recei
allochka39001 [22]

Answer:

e. Debit Petty Cash $50       Credit Cash  $ 50

Explanation:

The entry on October 01 is to reflect the increase in Petty Cash from $ 250 to $ 300. i.e the incremental effect is only $ 50. This is because for the regular replenishment that was done on September 30, the following entry would have been recorded:

Petty Cash - Debit   $ 232

Cash          - Credit   $ 232

The entry for recording the petty cash expenses would be as follows;

Office Supplies expense         debit    $ 73

Merchandise Inventory           debit     $ 137

Miscellaneous expenses        debit      $ 22

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7 0
3 years ago
Nozzle is a specially designed product that retro fits into your existing water faucet and atomizes the water stream in a spray
aleksandrvk [35]

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a discontinuous innovation

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Please see attachment .

7 0
3 years ago
If the appropriate discount rate for this bond is 6%, what would you be willing to pay for ABC’s bond?
Juliette [100K]

Question:

Suppose there is a bond in ABC Company that that pays coupons of 8.5%, and suppose that these coupons are paid annually.

Suppose the face value of the ABC bond is $1000 and the maturity is 11 years.

If the appropriate discount rate for this bond is 6%, what would you be willing to pay for ABC’s bond?

Answer:

Price of bond = $ 1197.17

Explanation:

<em>The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV)</em>.  

Value of Bond = PV of interest + PV of RV  

The price of the bond can be worked out as follows:  

S<em>tep 1  </em>

<em>PV of interest payments </em>

Annual Interest payment =  8.5%× 1000 = 85

Annual yield = 6%

Total period to maturity (in years) = 11  

PV of interest =  

85 × (1- (1+0.06)^(-11)/)/0.06 = 670.38

<em />

<em>Step 2  </em>

<em>PV of Redemption Value </em>

= 1,000 × (1.06)^(-11) = 526.78

<em>Step 3:</em>

<em>Price of bond  </em>

670.38 + 526.78= 1,197.17

Price of bond = $ 1197.17

6 0
3 years ago
When a salesman travels for his company, he is given ______ ______, a specific amount of money he can spend for food, travel and
suter [353]

Answer:

a. per diem

Explanation:

The salesman's job responsibility to increase the sales for the company through which the company could accomplish its future goals. In exchange for that, the salesman gets the remuneration the company hired for.  

As when the salesman travels for his company, he has given the specific amount for food, travel, and hotel per diem. The per diem is a Latin word that means per day.

The daily allowance is given by the company to a salesman with the hope that the salesman perform his duties well so that he could be appraised in the next new months with respect to the promotion and other perks

7 0
3 years ago
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