Download - Chap 05
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
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
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.
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
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
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:
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 -