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Exercise 7-5 (Recognition of Profit for Long-Term Contracts) Andre Agassi
Construction Company began operations January 1, 2008. During the year, Andre
Agassi Construction entered into a contract with Lindsey Davenport Corp. to
construct a manufacturing facility. At that time, Agassi estimated that it would take 5
years to complete the facility at a total cost of $4,500,000. The total contract price for
construction of the facility is $6,300,000. During the year, Agassi incurred
$1,185,800 in construction costs related to the construction project. The estimated
cost to complete the contract is $4,204,200. Lindsey Davenport Corp. was billed and
paid 30% of the contract price.
Exercise 7-8 (Installment-Sales and Cost-Recovery Methods) Kenny Harrison Corp.,
a capital goods manufacturing business that started on January 4, 2008, and
operates on a calendar-year basis, uses the installment-sales method of profit
recognition in accounting for all its sales. The following data were taken from the
2008 and 2009 records.
Exercise 8-9 (Computing Bad Debts and Preparing Journal Entries) The trial balance
before adjustment of Reba McIntyre Inc. shows the following balances.
Exercise 8-27 (Bank Reconciliation and Adjusting Entries) Angela Lansbury
Company deposits all receipts and makes all payments by check. The following
information is available from the cash records.