chap 05

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Student Name: Class: Problem 05-02 Requirement 1: 2011 Cost recovery %: = Gross profit % = 2012 Cost recovery %: = Gross profit % = 2011 Gross Profit: Cash collection from 2011 sa = X = 2012 Gross Profit: Cash collection from 2011 sa = X = Cash collection from 2012 sa = X = Total 2012 gross profit Requirement 2: Date Account Debit Credit 2011 To record installment sales Installment receivables Inventory Deferred gross profit 2011 To record cash collections from installment sales Cash Installment receivables 2011 To recognize gross profit from installment sales Deferred gross profit Realized gross profit 2012 To record installment sales Installment receivables Inventory Deferred gross profit 2012 To record cash collections from installment sales Cash Installment receivables 2012 To recognize gross profit from installment sales Deferred gross profit Realized gross profit

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Student Name:Class:

Problem 05-02

Requirement 1:

2011 Cost recovery %:

= Gross profit % =

2012 Cost recovery %:

= Gross profit % =

2011 Gross Profit:

Cash collection from 2011 sales = X =

2012 Gross Profit:

Cash collection from 2011 sales = X =Cash collection from 2012 sales = X = Total 2012 gross profit

Requirement 2:

Date Account Debit Credit2011 To record installment sales

Installment receivables Inventory Deferred gross profit

2011 To record cash collections from installment salesCash Installment receivables

2011 To recognize gross profit from installment salesDeferred gross profit Realized gross profit

2012 To record installment salesInstallment receivables Inventory Deferred gross profit

2012 To record cash collections from installment salesCash Installment receivables

2012 To recognize gross profit from installment salesDeferred gross profit Realized gross profit

B9
Enter appropriate data in yellow cells. Your totals will be verified.
E32
Enter appropriate data in yellow cells. Your entries will be verified.

Requirement 3:

Date Cash Collected Cost Recovery

20112011 sales

20122011 sales2012 sales2012 totals

Date Account Debit Credit2011 To record installment sales

Installment receivables Inventory Deferred gross profit

2011 To record cash collections from installment salesCash Installment receivables

2012 To record installment salesInstallment receivables Inventory Deferred gross profit

2012 To record cash collections from installment salesCash Installment receivables

2012 To recognize gross profit from installment salesDeferred gross profit Realized gross profit

E73
Enter appropriate data in yellow cells. Your entries will be verified.

Problem 05-02

Gross Profit

Given Data P05-02:

AJAX COMPANY

Installment Sales 2011 2012Sales $ 300,000 $ 400,000 Cost of sales 180,000 280,000 Customer collections on: 2011 sales 120,000 100,000 2012 sales 150,000

Student Name:Class:

Problem 05-03

Requirement 1:SILVA COMPANY

Gross Profit Recognized

Total profitInstallment sales method: Gross profit %

8/31/2011 8/31/2012 8/31/2013 8/31/2014 8/31/2015Cash collectionsPoint of delivery methodInstallment sales methodCost recovery method

Requirement 2:SILVA COMPANYGeneral Journal

Point of Delivery Installment Sales Cost RecoveryAccount Debit Credit Debit Credit DebitInstallment receivable Sales revenueCost of goods sold InventoryTo record sale on 8/31/11.

Installment receivable Inventory Deferred gross profitTo record sale on 8/31/11.

Cash Installment receivedEntry made each Aug. 31.

Deferred gross profit Realized gross profitEntry made each Aug. 31.

Deferred gross profit Realized gross profitEntry made 8/31/14 & 8/31/15.

E9
Enter appropriate data in yellow cells. Your entries will be verified. NOTE: Not all cells will contain numbers.
E10
HINT: Since this number is the result of a division calculation enter it as a decimal.
C26
Enter appropriate data in yellow cells. Your entries will be verified. NOTE: Not all cells will contain numbers.

Student Name:Class:

Problem 05-03

Requirement 3:SILVA COMPANY

Partial Balance Sheet

Point of Installment CostDelivery Sales Recovery

December 31, 2011AssetsInstallment receivableLess deferred gross profitInstallment receivables, net

December 31, 2012AssetsInstallment receivableLess deferred gross profitInstallment receivables, net

C58
Enter appropriate data in yellow cells. Your entries will be verified.

SILVA COMPANYGeneral Journal

Cost RecoveryCredit

Given Data P05-03:

SILVA COMPANY

Merchandise sold $ 500,000 Down payment $ 100,000 Annual installments (4) $ 100,000 Book value of merchandise $ 300,000

Student Name:Class:

Problem 05-05

WESTGATE CONSTRUCTION COMPANY

Requirement 1:

Gross profit to be recognized 2011 2012 2013

Contract price

Actual costs to date

Estimated costs to complete

Total estimated costs

Estimated gross profit (loss)

Gross profit (loss) 2011 2012 2013

recognition:

Requirement 2:

WESTGATE CONSTRUCTION COMPANY

General Journal

2011 2012 2013

Account Debit Credit Debit Credit Debit

Construction in progress

Various accounts

To record construction costs.

Accounts receivable

Billings on construction contract

To record progress billings.

Cash

Accounts receivable

To record cash collections

Construction in progress

Cost of construction

Rev. from long-term contracts

To record gross profit.

Requirement 3:

WESTGATE CONSTRUCTION COMPANY

Partial Balance Sheet

2011 2012

Current assets:

Accounts receivable

Construction in progress

Less: Billings

Costs and profit in excess

of billings

C9
Enter appropriate data in yellow cells. Your entries for "Estimated gross profit (loss)" and "Gross profit (loss) recognition" will be verified.
C26
Enter appropriate data in yellow cells. Your entries will be verified.
D49
Enter appropriate data in yellow cells. Your entries will be verified.

Student Name:Class:

Problem 05-05

Requirement 4:

2011 2012 2013

Costs incurred during year

Estimated cost to complete

as of year-end

2011 2012 2013

Contract price

Actual costs to date

Estimated costs to complete

Total estimated costs

Estimated gross profit (loss)

Gross profit (loss) 2011 2012 2013

recognition:

Requirement 5:

2011 2012 2013

Costs incurred during year

Estimated cost to complete

as of year-end

2011 2012 2013

Contract price

Actual costs to date

Estimated costs to complete

Total estimated costs

Estimated gross profit (loss)

Gross profit (loss) 2011 2012 2013

recognition:

C63
Enter appropriate data in yellow cells. Your entries for "Estimated gross profit (loss)" and "Gross profit (loss) recognition" will be verified.
C81
Enter appropriate data in yellow cells. Your entries for "Estimated gross profit (loss)" and "Gross profit (loss) recognition" will be verified.

WESTGATE CONSTRUCTION COMPANY

General Journal

2013

Credit

Given Data P5-05:

WESTGATE CONSTRUCTION COMPANY

Contract information:Contract amount $10,000,000

2011 2012 2013Cost incurred during the year $ 2,400,000 $ 3,600,000 $ 2,200,000 Estimated costs to complete as of year-end 5,600,000 2,000,000 - Billings during the year 2,000,000 4,000,000 4,000,000 Cash collections during the year 1,800,000 3,600,000 4,600,000

Costs incurred and costs to complete information (Part 4):

2011 2012 2013Costs incurred during the year $ 2,400,000 $ 3,800,000 $ 3,200,000 Estimated costs to complete as of year-end 5,600,000 3,100,000 -

Costs incurred and costs to complete information (Part 5):

2011 2012 2013Costs incurred during the year $ 2,400,000 $ 3,800,000 $ 3,900,000 Estimated costs to complete as of year-end 5,600,000 4,100,000 -