ACCT 557 ACCT557 Week 1 Quiz Answers (Devry)
ACCT 557 Week 1 quiz
- (TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info from the project accountant:
- (TCO A) Kerry Corp purchased a used bottling machine from Bob's Bottling Inc. on Jan 1, 2012 for $2100000. Bob accounted for the sale correctly under the installment sales method. It had a book value of $1575000. Kerry paid with $300000 cash and a note for $1800000 with an annual interest of 10%. Kerry agreed to make equal annual payments of $600000. Kerry Corp made their first payment on Jan 1, 2013 of $780000 which included interest of $180000 to date of payment.
As of Dec 31, 2013 Bob has deferred gross profit of ?
- (TCO A) Blue Suede Construction Corp used the percentage-of-completion method of revenue recognition. They were contracted to build the new amphitheater for $800000. Additional information was provided:
As of Dec 31…. 2012 2013
Percentage of completion 15% 40%
Estimated total expected costs $550,000 $580,000
Gross profit recognized (Cumulative) $50,000 $99,000
Contracted costs incurred during 2013 were…
- (TCO A) In industries with high rates of return (such as a magazine distribution company) an alternative method of revenue recognition would be…
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