I have these questions, I wanna the correct answers withexplaination FOR ALL Q , please:
1-On December 15, 2016, Rigsby Sales Co. sold a tract of landthat cost $3,800,000 for $5,000,000. Rigsby appropriately uses theinstallment sales method of accounting for this transaction. Termscalled for a down payment of $440,000 with the balance in two equalannual installments payable on December 15, 2017, and December 15,2018. Ignore interest charges. Rigsby has a December 31year-end.
In 2017, Rigsby would recognize realized gross profit of:
A- $ 0.
B- $547,200.
C- $447,200.
D- $597,200.
2-
Johnson sells $112,000 of product to Robbins, and also purchases$12,400 of advertising services from Robbins. The advertisingservices have a fair value of $9,200. Johnson should record revenueon its sale of product to Robbins of:
A- $108,800
B- $112,000
C- $102,800
D- $99,600
3-
Arizona Desert Homes (ADH) constructed a new subdivision during2015 and 2016 under contract with Cactus Development Co. Relevantdata are summarized below:
Contract amount $2,595,000 Cost: 2015 1,110,000 2016 510,000 Gross profit: 2015 665,000 2016 310,000 Contract billings: 2015 1,297,500 2016 1,297,500
ADH recognizes revenue upon completion of the contract. In its December 31, 2015, balance sheet, ADH would report:
A- The contract asset, contract amount in excess of billings, of$1,297,500
B- The contract asset, cost and profits in excess of billings,of $477,500
C- The contract liability, billings in excess of cost, of$187,500
D- The contract asset, deferred profit, of $310,000
4-
Gupta Industries received a $290,000 prepayment from PackardAssociates for the sale of new equipment. Gupta will bill Packardan additional $111,000 upon delivery of the equipment. Upon receiptof the $290,000 prepayment, how much should Gupta recognize for acontract asset, a contract liability, and accounts receivable?
rev: 08_24_2015_QC_CS-15471
A- Contract asset: $0; contract liability: $290,000, accountsreceivable, $0.
B- Contract asset: $0; contract liability: $290,000, accountsreceivable, $111,000.
C- Contract asset: $290,000; contract liability: $0, accountsreceivable, $0.
D- Contract asset: $290,000; contract liability: $0, accountsreceivable, $111,000.
5-
Maas LLP developed software that helps farmers to plow theirfields in a manner that prevents erosion and maximizes theeffectiveness of irrigation. Sunny Dale paid a licensing fee of$17,000 for a copy of the software. Although Sunny Dale can use thesoftware as long as it wants, Maas expects that Sunny Dale will usethe software for approximately 5 years. Maas does not anticipateany further interaction with Sunny Dale following transfer of thelicense. How much revenue should Maas recognize in the first yearof the contract?
A- $3,400
B- $4,250
C- $17,000
D- $0
6-
Excerpts fromDowling Company's December 31, 2016 and 2015, financial statementsand key ratios are presented below (all dollar values are inmillions):
2016 2015 Accounts receivable (net) $27 15 Netsales $170 84 Costof goods sold $98 83 Netincome $27 24 Inventory turnover 5.60 Return on assets 11.5% Equity Multiple 2.48
Dowling'saverage inventory balance for 2016 is (Round your answer toone decimal):
A- 15.0.
B- 18.0.
C- 17.5.
D- 18.5.
7-
Reliable Enterprises sells distressed merchandise on extendedcredit terms. Collections on these sales are not reasonablyassured, and bad debt losses cannot be reasonably predicted. It isunlikely that repossessed merchandise is in condition to bere-sold. Therefore, Reliable uses the cost recovery method.Merchandise costing $30,500 was sold for $57,250 in 2015.Collections on this sale were $21,800 in 2015, $15,300 in 2016, and$20,150 in 2017.
In 2017, Reliable would recognize gross profit of:
A- $20,150.
B- $ 0.
C- $ 6,000.
D- $ 9,000.
8-
Reliable Enterprises sells distressed merchandise on extendedcredit terms. Collections on these sales are not reasonablyassured, and bad debt losses cannot be reasonably predicted. It isunlikely that repossessed merchandise is in condition to bere-sold. Therefore, Reliable uses the cost recovery method.Merchandise costing $31,750 was sold for $58,500 in 2015.Collections on this sale were $20,600 in 2015, $14,800 in 2016, and$23,100 in 2017.
In 2015, Reliable would recognize gross profit of:
A- $ 0.
B- $8,917.
C- $ 8,254.
D- $26,750
9-
Excerpts fromDowling Company's December 31, 2016 and 2015, financial statementsand key ratios are presented below (all dollar values are inmillions):
2016 2015 Accounts receivable (net) $28 $20 Netsales $175 92 Costof goods sold $99 84 Netincome $28 25 Inventory turnover 5.50 Return on assets 11.6% Equity Multiple 2.49
Dowling's returnon equity for 2016 is (Round your answer to wholepercentage):
A- 26%.
B- 29%.
C- 16%.
D- 7%.
10-
Lake Power Sports sells jet skis and other powered recreationalequipment. Customers pay one-third of the sales price of a jet skiwhen they initially purchase the ski, and then pay anotherone-third each year for the next two years. Because Lake has littleinformation about the ability to collect these receivables, it usesthe installment sales method for revenuerecognition. In 2015, Lake began operations and sold jet skis witha total price of $1,170,000 that cost Lake $585,000. Lake collected$390,000 in 2015, $390,000 in 2016, and $390,000 in 2017 associatedwith those sales. In 2016, Lake sold jet skis with a total price of$1,530,000 that cost Lake $918,000. Lake collected $510,000 in2016, $405,000 in 2017, and $405,000 in 2018 associated with thosesales. In 2018, Lake also repossessed $210,000 of jet skis thatwere sold in 2016. Those jet skis had a fair value of $78,750 atthe time they were repossessed.
In 2015, Lake would recognize realized gross profit of:
A- $585,000.
B- $ 0.
C- $390,000.
D- $195,000.
I have these questions, I wanna the correct answers withexplaination FOR ALL Q , please:
1-On December 15, 2016, Rigsby Sales Co. sold a tract of landthat cost $3,800,000 for $5,000,000. Rigsby appropriately uses theinstallment sales method of accounting for this transaction. Termscalled for a down payment of $440,000 with the balance in two equalannual installments payable on December 15, 2017, and December 15,2018. Ignore interest charges. Rigsby has a December 31year-end. |
A- $ 0.
B- $547,200.
C- $447,200.
D- $597,200.
2-
Johnson sells $112,000 of product to Robbins, and also purchases$12,400 of advertising services from Robbins. The advertisingservices have a fair value of $9,200. Johnson should record revenueon its sale of product to Robbins of:
A- $108,800
B- $112,000
C- $102,800
D- $99,600
3-
Arizona Desert Homes (ADH) constructed a new subdivision during2015 and 2016 under contract with Cactus Development Co. Relevantdata are summarized below:
| Contract amount | $2,595,000 | |
| Cost: | 2015 | 1,110,000 |
| 2016 | 510,000 | |
| Gross profit: | 2015 | 665,000 |
| 2016 | 310,000 | |
| Contract billings: | 2015 | 1,297,500 |
| 2016 | 1,297,500 |
| ADH recognizes revenue upon completion of the contract. |
| In its December 31, 2015, balance sheet, ADH would report: |
A- The contract asset, contract amount in excess of billings, of$1,297,500
B- The contract asset, cost and profits in excess of billings,of $477,500
C- The contract liability, billings in excess of cost, of$187,500
D- The contract asset, deferred profit, of $310,000
4-
Gupta Industries received a $290,000 prepayment from PackardAssociates for the sale of new equipment. Gupta will bill Packardan additional $111,000 upon delivery of the equipment. Upon receiptof the $290,000 prepayment, how much should Gupta recognize for acontract asset, a contract liability, and accounts receivable?
rev: 08_24_2015_QC_CS-15471
A- Contract asset: $0; contract liability: $290,000, accountsreceivable, $0.
B- Contract asset: $0; contract liability: $290,000, accountsreceivable, $111,000.
C- Contract asset: $290,000; contract liability: $0, accountsreceivable, $0.
D- Contract asset: $290,000; contract liability: $0, accountsreceivable, $111,000.
5-
Maas LLP developed software that helps farmers to plow theirfields in a manner that prevents erosion and maximizes theeffectiveness of irrigation. Sunny Dale paid a licensing fee of$17,000 for a copy of the software. Although Sunny Dale can use thesoftware as long as it wants, Maas expects that Sunny Dale will usethe software for approximately 5 years. Maas does not anticipateany further interaction with Sunny Dale following transfer of thelicense. How much revenue should Maas recognize in the first yearof the contract?
A- $3,400
B- $4,250
C- $17,000
D- $0
6-
| Excerpts fromDowling Company's December 31, 2016 and 2015, financial statementsand key ratios are presented below (all dollar values are inmillions): |
| 2016 | 2015 | |
| Accounts receivable (net) | $27 | 15 |
| Netsales | $170 | 84 |
| Costof goods sold | $98 | 83 |
| Netincome | $27 | 24 |
| Inventory turnover | 5.60 | |
| Return on assets | 11.5% | |
| Equity Multiple | 2.48 |
| Dowling'saverage inventory balance for 2016 is (Round your answer toone decimal): |
A- 15.0.
B- 18.0.
C- 17.5.
D- 18.5.
7-
Reliable Enterprises sells distressed merchandise on extendedcredit terms. Collections on these sales are not reasonablyassured, and bad debt losses cannot be reasonably predicted. It isunlikely that repossessed merchandise is in condition to bere-sold. Therefore, Reliable uses the cost recovery method.Merchandise costing $30,500 was sold for $57,250 in 2015.Collections on this sale were $21,800 in 2015, $15,300 in 2016, and$20,150 in 2017.
In 2017, Reliable would recognize gross profit of:
A- $20,150.
B- $ 0.
C- $ 6,000.
D- $ 9,000.
8-
Reliable Enterprises sells distressed merchandise on extendedcredit terms. Collections on these sales are not reasonablyassured, and bad debt losses cannot be reasonably predicted. It isunlikely that repossessed merchandise is in condition to bere-sold. Therefore, Reliable uses the cost recovery method.Merchandise costing $31,750 was sold for $58,500 in 2015.Collections on this sale were $20,600 in 2015, $14,800 in 2016, and$23,100 in 2017.
In 2015, Reliable would recognize gross profit of:
A- $ 0.
B- $8,917.
C- $ 8,254.
D- $26,750
9-
| Excerpts fromDowling Company's December 31, 2016 and 2015, financial statementsand key ratios are presented below (all dollar values are inmillions): |
| 2016 | 2015 | |
| Accounts receivable (net) | $28 | $20 |
| Netsales | $175 | 92 |
| Costof goods sold | $99 | 84 |
| Netincome | $28 | 25 |
| Inventory turnover | 5.50 | |
| Return on assets | 11.6% | |
| Equity Multiple | 2.49 |
| Dowling's returnon equity for 2016 is (Round your answer to wholepercentage): |
A- 26%.
B- 29%.
C- 16%.
D- 7%.
10-
Lake Power Sports sells jet skis and other powered recreationalequipment. Customers pay one-third of the sales price of a jet skiwhen they initially purchase the ski, and then pay anotherone-third each year for the next two years. Because Lake has littleinformation about the ability to collect these receivables, it usesthe installment sales method for revenuerecognition. In 2015, Lake began operations and sold jet skis witha total price of $1,170,000 that cost Lake $585,000. Lake collected$390,000 in 2015, $390,000 in 2016, and $390,000 in 2017 associatedwith those sales. In 2016, Lake sold jet skis with a total price of$1,530,000 that cost Lake $918,000. Lake collected $510,000 in2016, $405,000 in 2017, and $405,000 in 2018 associated with thosesales. In 2018, Lake also repossessed $210,000 of jet skis thatwere sold in 2016. Those jet skis had a fair value of $78,750 atthe time they were repossessed.
In 2015, Lake would recognize realized gross profit of:
A- $585,000.
B- $ 0.
C- $390,000.
D- $195,000.
Unlock all answers
