Contract
Contract is a written document that creates legal enforcement for buying and selling the property. It is committed by the parties to performing their obligation and enforcing their rights.
Revenue recognized point of long term contract
A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized by revenue minus cost of completion until date.
If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.
To determine: The items that would appear in the
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LooseLeaf Intermediate Accounting w/ Annual Report; Connect Access Card
- 31, 20x1 Requirement: Provide the journal entry on Nov. 14, 20x1. Offsetting of financial assets and financial liabilities 5. On Nov. 14, 20x1, Athena Co. sold its P30,000 loan receivabl 6. On December 31, 20x1, Twinkle Co. has accounts receivable because the credit term for the accounts payable is one month longer than the accounts receivable, Twinkle Co. intends to currently. Twinkle Co. has the legal right of offset. However, P200,000 and P180,000, respectively. Both accounts are due from, and accounts payable to, Star, Inc. amounting to Requirements: Provide compute for the interest income in 20x2 from Zevrek Co. to Devin Bank for P28,000. The future date for P28,000 plus interest based on the curre agreement requires Athena Co. to repurchase the loan at Evaluation of transfers of financial assets market rate on repurchase date. Offsetting of financial assets and financial liabilities from, and accounts payable to, Star, Inc. amountine P200,000 and P180,000, respectively. Both…arrow_forwardter 6 Exercises 1 pok int i int 9 ences Exercise 6-19 (Algo) Long-term contract; revenue recognition over time and at a point in time [LO6-9] Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,600,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: Costs incurred during the year. Estimated costs to complete as of 12/31 Billings during the year. Cash collections during the year Complete this question by entering your answers in the tabs below. Required 1 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…arrow_forwardProblem 6-3: The Kissagram Corporation The Kissagram Corporation produced the following summary of its Accounts Receivable on October 31, 2021: Customer Total $ Notes Aniston 9000 25% over 30-60 days; Remainder 90. Leblanc 9000 100% > 90 days outstanding. Required 1. Prepare an aged schedule of Accounts Receivable. Use the following categories: 90 days (delinquent). 2. Compute the balance for the Allowance for Doubtful accounts (rounded to the nearest $). Assume bad debt percentages for each category of 0.7%, 7%, 12% and 22%. Upon completion, enter the following data here: Allowance for Doubtful Accounts submitarrow_forward
- Page 328 EXERCISE 7.9 Industry Characteristics and Collection Performance e LO7-8 The following information was taken from annual reports of Goodyear Tire & Rubber and PPL Corp.., a public utility: Goodyear PPL Net sales $18.1 billion $ 11.5 billion Average accounts receivable 2.3 billion 923 million a. Compute for each company the accounts receivable turnover rate for the year. b. Compute for each company the average number of days required to collect outstanding receivables (round answers to nearest whole day). c. Explain why the figures computed for Goodyear in parts a and b are so different from those computed for PPL.arrow_forward43 _________________ is a written promise to pay a specified amount on a definite future date within one year or the company’s operating cycle, whichever is longer. a. Short-term note payable b. Short- term notes receivables c. Long-term note receivables d. Long-term notes payablearrow_forwardQestion 1 a) Many loan agreements have financial covenants that rely on: Multiple Choice A. floating GAAP. B. fixed GAAP. C. flexible GAAP. D. regulatory accounting procedures (RAP). b) With respect to executive compensation, the Dodd-Frank Act requires that shareholders: Multiple Choice A. vote on executive compensation at least once every three years. B. vote on executive compensation every fiscal period. C. determine the annual executive compensation package for key executives. D. not discuss any aspects of executive compensation with-non shareholders.arrow_forward
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