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
Step2247 [10]
3 years ago
11

MSK Construction Company contracted to construct a factory building for $525,000. Construction started during 20X1 and was compl

eted in 20X2. Information relating to the contract follows:
20X1 20X2
Costs incurred during the year $290,000 $150,000
Estimated additional cost to complete 145,000 —
Billings during the year 260,000 265,000
Cash collections during the year 240,000 285,000

Required:
a. Record the preceding transactions in MSK’s books assuming it recognizes revenue over time and uses costs incurred to measure the extent to which its performance obligation has been satisfied.
b. Record the preceding transactions in MSK’s books assuming it recognizes revenue at a point in time when control of the completed factory is transferred to the customer at the end of the project.
Business
1 answer:
kicyunya [14]3 years ago
3 0

Answer:

MSK Construction Company

a. Journal Entries, under the assumption that MSK recognizes revenue over time and uses costs incurred to measure the extent to which its performance obligation has been satisfied:

20X1:

Debit Work in Process $290,000

Credit Cash Account $290,000

To record the cost incurred for the contract.

Debit Accounts Receivable $260,000

Debit Unbilled Cost of Contract $90,000

Credit Contract Revenue $350,000

To record the amount billed to customer and revenue.

Debit Cash Account $240,000

Credit Accounts Receivable $240,000

To record the cash receipts from customer.

20X2:

Debit Work in Process $150,000

Credit Cash Account $150,000

To record the cost incurred for the contract.

Debit Accounts Receivable $265,000

Credit Unbilled Cost of Contract $90,000

Credit Contract Revenue $175,000

To record the amount billed to customer and corresponding revenue.

Debit Cash Account $285,000

Credit Accounts Receivable $285,000

To record the cash receipts from customer.

b. Journal Entries, under the assumption that MSK recognizes revenue at a point in time when control of the completed factory is transferred to the customer at the end of the project:

20X1:

Debit Work in Process $290,000

Credit Cash Account $290,000

To record the cost incurred for the contract.

Debit Accounts Receivable $260,000

Credit Unearned Revenue $260,000

To record the amount billed to customer.

Debit Cash Account $240,000

Credit Accounts Receivable $240,000

To record the cash receipts from customer.

20X2:

Debit Work in Process $150,000

Credit Cash Account $150,000

To record the cost incurred for the contract.

Debit Accounts Receivable $265,000

Debit Unearned Revenue $260,000

Credit Contract Revenue $525,000

To record the amount billed to customer and revenue.

Debit Cash Account $285,000

Credit Accounts Receivable $285,000

To record the cash receipts from customer.

Explanation:

a) Data and Calculations:

Contract price = $525,000

                                                                     20X1           20X2

Costs incurred during the year              $290,000    $150,000

Estimated additional cost to complete   $145,000         —

Estimated Total costs                              $435,000    $150,000

Billings during the year                             260,000     265,000

Cash collections during the year             240,000      285,000

Revenue Recognition for 20X1:

= incurred cost/Total estimated costs * contract price

= $290,000/$435,000 * $525,000

= $350,000

Revenue Recognition for 20X2:

= $525,000 - $350,000

= $175,000

You might be interested in
As Bart Brownlee approached retirement, he decided the time had come to invest some of his nest egg in a conservative fund. He c
Serga [27]

Answer:

$1,275

Explanation:

The computation of the amount of commission for paying is shown below:

= Invested amount × fund charges a load percentage

= $30,000 × 4.25%

= $1,275

By multiplying the invested amount with the fund charges a load percentage we can easily calculate the amount of commission and the same is to be considered

8 0
3 years ago
On January 1, 2018, Allgood Company purchased equipment and signed a six-year mortgagenote for $186,000 at 15%. The note will be
Ne4ueva [31]

Answer:

The correct answer is A: interest= $21048

Explanation:

An amortization schedule is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term. While each periodic payment is the same amount early in the schedule, the majority of each payment is interest; later in the schedule, the majority of each payment covers the loan's principal.

Each payment is the same ($49,148), but the proportions of interest and capital pay changes. The interest proportion decreases from pay to pay.

Loan= 186000

i= 15%

n= 6 years

First pay:

i=186000*0,15=27900

amortization= 49148-27900=21248

Second pay:

i=(186000-21248)*0,15=24712

amort=49148-24712=24436

Third pay:

i=(164752-24436)*0,15=21048

amort=49148-21048=28100

While payments progress, interest decreases and amortization increases.

5 0
3 years ago
Yolanda's Coffee Shop makes a blend that is a mixture of two types of coffee. Type A coffee costs Yolanda $4.25 per pound, and t
vovangra [49]

Answer:

she used type A coffee is 62 pounds

Explanation:

given data

Type A coffee costs = $4.25 per pound

type B coffee costs = $5.60 per pound

this month Yolanda made = 155 pounds

this month total cost = $784.30

to find out

How many pounds of type A coffee did she use

solution

we consider here that this month type A coffee used = x

and type B coffee used = y

so equation will be

x + y = 155       ..................1

and cost equation

4.25 x + 5.60 y = 784.30       ...............2

now from equation 1 we get y

y = 155 - x     .........................3

put this value in equation 2

4.25 x + 5.60 y = 784.3

4.25 x + 5.60 ( 155 - x) = 784.3

solve this equation we get

x = 62

so she used type A coffee is 62 pounds

3 0
3 years ago
A company's chart of accounts is: a detailed list of the accounts that make up the five financial statement elements. the set of
polet [3.4K]

Answer:

A detailed list of the accounts that make up the five financial statement elements.

Explanation:

The company's chart of accounts is the listing of all the accounts that the company has included as part of the five financial statement elements during a specific period of time.

The five financial statement elements are: assets, liabilities, equity (part of the balance sheet), expenses and revenues (part of the income statement).

Examples of accounts that can be part of a firm's chart of accounts are: land (asset), cash (asset), notes payable (liabilities), outstanding stock (equity), operating expenses (expenses), and sales revenue (revenues).

The chart of accounts can differ greatly from company to company simply because companies engage in vastly different economic activities.

8 0
3 years ago
Suppose that the Dallas School District wants to achieve Six Sigma quality levels of performance in delivering students to schoo
Kay [80]

Answer:

a) 1.66 minutes

b) 3.4 out of million deliveries

Explanation:

So, it is a six sigma quality question, we first need to understand little bit about six sigma and how it is to achieve six sigma level.

<u>Six Sigma:</u>

It is the process or technique used by many organizations through out the world to achieve maximum quality in a product or in a service they are providing. It helps to indicate root causes of the process or you can say waste steps which first need to be identified then rectified to bring that top-notch quality in the system. So in this case, in order to calculate part a) we will calculate six sigma control limits.

a) So, for six sigma control limits, the maximum allowable standard deviation is 12 or you can say +6 + (-6) = ±6 = 12. It means all deviations must lie in all 12 standard deviations.

<em>Please refer to the table shown in the attachment.</em> This bell curve represent six sigma concept. In this <em>3 sigma quality level means all deviations must lie in 6 standard deviations.</em>

So, here we have been given that mean = 20, so with mean we can calculate standard deviation in six sigma control limits.

Maximum Allowable Standard Deviation for 6 sigma = Mean/12

                                                                                        = 20/12

                                                                                       = 1.66

So, 1.66 is the maximum allowable standard deviation of arrival times required in order to achieve 6 sigma quality level.

b) In this part, we are asked that, out of million deliveries about how many times bus deliver students too early or too late at this 6 sigma quality level.

<em>For this answer, please refer to attachment again</em>. and notice at the left bottom with the arrow of 6 sigma, we have a number 3.4 ppm means 3.4 part per million.

<em>So, it 3.4 times in a million deliveries bus will deliver students either too early or too late. </em>

8 0
3 years ago
Other questions:
  • At December 31, Folgeys Coffee Company reports the following results for its calendar year. Cash sales $ 901,000 Credit sales 30
    9·1 answer
  • On November 1, Ashton sells her interest in XYZ partnership to Wayne for $200,000 cash and a release of liability of $30,000. As
    7·1 answer
  • Thrush Corporation, a calendar-year C corporation, files it's 2018 Form 1120, which reports taxable income of $200,000 for the y
    14·1 answer
  • Benz Company is considering the purchase of a machine that costs $100,000, has a useful life of 18 years, and no salvage value.
    10·1 answer
  • The teenage market is a market that is categorized in what way?
    10·1 answer
  • The first step of the marketing process is to​ ___________________.A. design a​ customer-driven marketing strategyB. build profi
    15·1 answer
  • Which of the following is a tip for creating successful content for social​ media? A. Write formally to impress your audience. B
    15·2 answers
  • has a target debt−equity ratio of 1.35. Its WACC is 8.3 percent, and the tax rate is 35 percent. If the company’s cost of equity
    9·1 answer
  • Distinguish between formal and informal methods of researching data for a business message.
    9·1 answer
  • ABC Company holds a well-diversified portfolio in the amount of $90,000 that has an expected return of 11.0% and a beta of 1.28.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!