Business, 27.05.2020 19:03, filzaf9632

On January 1, 2015, assume that Dependable Construction Company agreed to construct a luxury residential complex for Heavenly Real Estate for $100 million. Heavenly Real Estate must pay $20 million upon signing, and $20 million each year at the end of 2015, 2016, 2017, and 2018. Expected costs of construction are $15 million for 2015, $40 million for 2016, $15 million for 2017, and $10 million in 2018, paid at the end of each year. Also assume that an appropriate interest rate for this contract is 8%. Amortization schedules for the deferred cash flows are as follows:

Amortization Schedule for Cash Received balance interest reduction balance year 1-Jan revenue payment in principal 31-Dec 2015 $66,242,536.80 $5,299,402.94 $20,000,000.00 $14,700,597.06 $51,541,939.74 2016 $51,541,939.74 $4,123,355.18 $20,000,000.00 $15,876,644.82 $35,665,294.92 2017 $35,665,294.92 $2,853,223.59 $20,000,000.00 $17,146,776.41 $18,518,518.52 2018 $18,518,518.52 $1,481,481.48 $20,000,000.00 $18,518,518.52 $0.00

Amortization Schedule for Cash Disbursed balance interest reduction balance year 1-Jan revenue payment in principal 31-Dec 2015 $67,440,223.84 $5,395,217.91 $15,000,000.00 $9,604,782.09 $57,835,441.75 2016 $57,835,441.75 $4,626,835.34 $40,000,000.00 $35,373,164.66 $22,462,277.09 2017 $22,462,277.09 $1,796,982.17 $15,000,000.00 $13,203,017.83 $9,259,259.26 2018 $9,259,259.26 $740,740.74 $10,000,000.00 $9,259,259.26 $0.00

a) Indicate the amount and nature of income (revenue and expense) that Dependable Construction Company would recognize for this contract during 2015, 2016, 2017, and 2018 if it uses the percentage-of-completion. Ignore income taxes. [10 points]

b) Using (b), indicate the amount and nature (revenue and expense) that Dependable Construction Company would recognize for this contract during 2015, 2016, 2017, and 2018 if it uses the installment method. Ignore income taxes. [10 points]

Answers: 1

Show answers

Other questions on the subject: Business

Business, 21.06.2019 21:00, dasiaflowers85

Identifying transactions national park tours co. is a travel agency. the nine transactions recorded by national park tours during may 2019, its first month of operations, are indicated in the following t accounts: cash (1) 75,000 (2) 900 (7) 8,150 (3) 1,600 (4) 6,280 (6) 2,700 (9) 2,500 accounts receivable (5) 12,300 (7) 8,150 supplies (2) 900 (8) 660 equipment (3) 8,000 accounts payable (6) 2,700 (3) 6,400 beth worley, capital (1) 75,000 beth worley, drawing (9) 2,500 fees earned (5) 12,300 operating expenses (4) 6,280 (8) 660 indicate for each debit and each credit (a) whether an asset, liability, owner's equity, drawing, revenue, or expense account was affected and (b) whether the account was increased (+) or decreased account debited account credited transaction type effect type effect (1) (2) (3) (4) (5) (6) (7) (8) (9)

Answers: 3

continue

Business, 22.06.2019 10:10, manny2275

True tomato inc. makes organic ketchup. to promote its products, this firm decided to make bottles in the shape of tomatoes. to accomplish this, true tomato worked with its bottle manufacture to create a set of unique molds for its bottles. which of the following specialized assets does this example demonstrate? (a) site specificity (b) research specificity (c) physical-asset specificity (d) human-asset specificity

Answers: 3

continue

Business, 22.06.2019 23:00, inucornspineapple

Type of deposit reserve requirementcheckable deposits $7.8 - 48.3 million 3%over $48.3 million 10noncheckable personal savings and time deposits 0refer to the accompanying table. if a bank has $60 million in savings deposits and $40 million in checkable deposits, then its required reserves are$1.2 million.

Answers: 1

continue

Business, 23.06.2019 02:40, rosehayden21

The law firm of furlan and benson accumulates costs associated with individual cases, using a job order cost system. the following transactions occurred during july: jul. 3 charged 175 hours of professional (lawyer) time to the obsidian co. breech of contract suit to prepare for the trial, at a rate of $150 per hour. 10 reimbursed travel costs to employees for depositions related to the obsidian case, $12,500. 14 charged 260 hours of professional time for the obsidian trial at a rate of $185 per hour. 18 received invoice from consultants wadsley and harden for $30,000 for expert testimony related to the obsidian trial. 27 applied office overhead at a rate of $62 per professional hour charged to the obsidian case. 31 paid administrative and support salaries of $28,500 for the month. 31 used office supplies for the month, $4,000. 31 paid professional salaries of $74,350 for the month. 31 billed obsidian $172,500 for successful defense of the case. required: a. provide the journal entries for each of these transactions. refer to the chart of accounts for exact wording of account titles. b. how much office overhead is over- or underapplied? c. determine the gross profit on the obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.

Answers: 2

continue

Do you know the correct answer?

On January 1, 2015, assume that Dependable Construction Company agreed to construct a luxury residen...