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Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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- Question: Lumin Ltd is a mid-size database system developer. Lumin signed a contract with Xenon Ltd to develop a database system (both hardware and software) for Xenon Ltd on 1 February 2024. The agreement states that the total consideration to be paid for the system will be $430,000. Lumin Ltd expects that its total costs for the system will be $335,000. By the end of its reporting period, 30 June 2024, Lumin Ltd had incurred wages cost of $65,000 and materials costs of $180,000 associated with the project. Of the materials costs, $30,000 is in respect of materials that have not yet been used on the system. Of the wages cost, $12,500 is an advance payment to subcontractors who had not performed their work on the project as at 30 June 2024. As at 30 June 2024, Xenon Ltd had made progress payments to Lumin Ltd of $250,000. Lumin Ltd calculates the measurement of progress using input methods in accordance with AASB15/IFRS 15. Required: A) Calculate the revenue to be recognised by Lumin…Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year Complete this question by entering your answers in the tabs below. Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show…Jordan's Records, Inc. has spent the following on research and development for 2022? What amount should be reported as R&D (research and development) expense? Salaries for research employees Developed technology purchased in a business acquisition. In-process R&D purchased in a business acquisition Supplies used in research projects Research performed for sale to another company in the future Mumple Choice $700,000 $620,000 $770,000 $ 500,000 250,000 150,000 120,000 30,000
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- Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at…Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at…Indicate how the following items would generally be reported in the financial statements:1. Investment in subsidiary company2. Cost of engineering activity required to advance the design of a product to the manufacturing stage3. Lease prepayment4. Cost of equipment purchased5. Cost of searching for applications of new research findings 6. Cost incurred in the formation of a corporation7. Training costs incurred in start-up of new operation8. Purchase cost of a franchise9. Goodwill generated internally10. Cost of testing in search of product alternatives11. Goodwill acquired in the purchase of a business12. Cost of developing a patent13. Cost of purchasing a patent from an inventor 14. Legal costs incurred in securing a patent15. Unrecovered costs of a successful legal suit to protect the patent16. Cost of conceptual formulation of possible product alternatives17. Cost of purchasing a copyright18. Research and development costs19. Cost of developing a trademark20. Cost of purchasing a…
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