(1)
Introduction: The financial statements of a company include balance sheets, income statements, and
To record: The
(2)
Introduction: The financial statements of a company include balance sheets, income statements, and cash flow statements. All these statements help the internal and external users of financial statements help in analyzing and concluding the financial position of the respective company.
To record: The journal entry for delivery on December 31, 2021.
(3)
Introduction: The financial statements of a company include balance sheets, income statements, and cash flow statements. All these statements help the internal and external users of financial statements help in analyzing and concluding the financial position of the respective company.
To record: The journal entry for collection on January 1, 2021, if delivery is on December 31, 2022.
(4)
Introduction: The financial statements of a company include balance sheets, income statements, and cash flow statements. All these statements help the internal and external users of financial statements help in analyzing and concluding the financial position of the respective company.
To record: The journal entry for collection on January 1, 2021, when the time value of money isn’t considered.
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INTERMEDIATE ACCOUNTING VOL 1&2 CONNECT
- On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?arrow_forwardOn January 1, 2019, Sinaran purchased equipment. Following are the costs incurred in connection with the purchase of this equipment: - Purchase price of IDR 500,000,000 plus 10% VAT (IDR 50,000,000) which can be credited - The company pays an independent professional to modify the equipment to fit the specifications desired by the company. The fee paid for professional services is IDR 40,000,000 and for the spare part costs for the modification purposes IDR 10,000,000. - The cost of testing the equipment so that it functions according to its purpose is Rp.25,000,000. - The proceeds from the sale of goods resulting from the testing process are IDR 5,000,000. Requested: Calculate the cost of the equipment according to PSAK 16arrow_forwardBartov Corporation agreed to build a warehouse for $2,500,000. Expected (and actual) costs for the warehouse follow : 2019, $400,000; 2020, $1,000,000; and 2021, $500,000. The company completed the warehouse in 2021. Compare revenues, expenses, and income for each year 2019 through 2021 assuming that Bartov’s performance obligation for the warehouse is fulfilled over time and that the costs incurred provide a close approximation of the value conveyed to the customer.arrow_forward
- Kindly explain how should the purchase on January 2, 2020 of additional machineries and equipments affect the depreciation in SYD method. Can you please show me the complete solution to get the depreciation for machinery and equipment (SYD method) on Dec. 31, 2020 and its carrying value at the same date? Thank you so much in advance!arrow_forwardBopha Ltd, a general construction company which is based in Limpopo, has a financial year end of 31 December. Bopha Ltd was in a process of constructing a new plant which was available for use on 1 January 2022. During the 2021 financial year, it withdrew its tractor loader, purchased on 1 January 2018 from normal construction operations, for the period 1 March 2021 to 30 June 2021 and used it in the construction of a new plant. This tractor loader had a carrying amount of 336 000 on 1 January 2021 and is depreciated at a rate 20% on straight line basis. The cost price of the new plant before capitalization is R1 200 000. Calculate the total cost of the new plant as at 31 December 2021. The new plant will be depreciated at 5% per annum on straight line basis when it becomes available for use. 1. R1 196 000 2. R1 140 000 3. R1 256 000 4. R1 200 000 5. R 840 000arrow_forwardCalculate the amount of revenue to be recognized in 2020 and 2021. Calculate the construction costs to be expensed in 2021. Prepare the journal entry at December 31, 2021, to record long-term contract revenues, expenses, and losses for 2021. What is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021? Show how the construction contract would be reported on the SFP and the income statement for the year ended December 31, 2021. Assume that Cullumber uses the zero-profit or completed-contract method. What would be the journal entry recorded on December 31, 2021?arrow_forward
- On May 1, 2020, Mount Company enters into a contract to transfer a product to Eric Company on September 30, 2020. It is agreed that Eric will pay the full price of $25,000 in advance on June 15, 2020. Eric pays on June 15, 2020, and Mount delivers the product on September 30, 2020. Prepare the journal entries required for Mount in 2020.arrow_forwardOn January 2, 2020, Sheridan Company began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 $ 594000 September 1, 2020 1806000 December 31, 2020 1806000 March 31, 2021 1806000 September 30, 2021 1193000 Sheridan Company borrowed $3320000 on a construction loan at 10% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $12960000 in 7% bonds outstanding in 2020 and 2021.What were the weighted-average accumulated expenditures for 2021 by the end of the construction period? a $4325600 b $5953200 c $4147200 d $903000arrow_forwardOn January 2, 2020, Sheridan Company began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 $ 594000 September 1, 2020 1806000 December 31, 2020 1806000 March 31, 2021 1806000 September 30, 2021 1193000 Sheridan Company borrowed $3320000 on a construction loan at 10% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $12960000 in 7% bonds outstanding in 2020 and 2021.What were the weighted-average accumulated expenditures for 2021 by the end of the construction period?arrow_forward
- On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as itsoffice headquarters. The building was completed on September 30, 2019. Expenditures on the project were asfollows:January 1, 2018 $1,000,000March 1, 2018 600,000June 30, 2018 800,000October 1, 2018 600,000January 31, 2019 270,000April 30, 2019 585,000August 31, 2019 900,000On January 1, 2018, the company obtained a $3 million construction loan with a 10% interest rate. The loanwas outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-termnotes of $4,000,000 and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually on all debt. The company’s fiscal year-end isDecember 31.Required:1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interestmethod.2. What is the total cost of the building?3. Calculate the amount of…arrow_forwardDuring 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.arrow_forwardCalculate the following: The first year of depreciation on a residential rental building costing $250,000 purchased June 2,2019. $_____________ The second year (2020) of depreciation on a computer costing $5,000 purchased in May 2019, using the half-year convention and accelerated depreciation considering any bonus depreciation taken. $______________ The first year of depreciation on a computer costing $2,800 purchased in May 2019, using the half-year convention and straight-line depreciation with no bonus depreciation. $______________ The third year of depreciation on business furniture costing $10,000 purchased in March 2017, using the half-year convention and accelerated depreciation but no bonus depreciation. $______________arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningIndividual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT