uses the 'cost-to-cost' method in measuring its progress on the contract. ABC Co. estimates total contract costs at completion of P4M. ABC incurs actual costs of P1M in 20x1. In 20x2, ABC incurs actual costs of P2.45M and revises its estimate of total contract costs at completion to P4.6M. ABC completes the construction in 20x3. The actual total cost of the contract is P4.5M. How much is the profit recognized in 20x3? c. 500,000 d. 550,000 a. 420,000 b. 450,000

uses the 'cost-to-cost' method in measuring its progress on the contract. ABC Co. estimates total contract costs at completion of P4M. ABC incurs actual costs of P1M in 20x1. In 20x2, ABC incurs actual costs of P2.45M and revises its estimate of total contract costs at completion to P4.6M. ABC completes the construction in 20x3. The actual total cost of the contract is P4.5M. How much is the profit recognized in 20x3? c. 500,000 d. 550,000 a. 420,000 b. 450,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

XYZ CO. delivered 150 portable gas stoves to DEF CO. on consignment. These stoves cost P2,700 each and could be sold for P4,500. The consignee is to be allowed a commission of 15% of the selling price. The agreement for the consignment contract stated that XYZ CO. would draw a sight draft on the consignee for 60% of the cost of the stoves and the advance shall be recovered periodically by monthly deductions (in proportion to units sold) from the remittances which accompany the account sales. All expenses of the consignee are to be deducted monthly as incurred. The consignee rendered an Account Sales at the end of the first month showing among others the following information: Advertising P6,750 Delivery expense P3,375 Commission P10,125 How much is the amount remitted by DEF to XYZ for the first month?
On 31 December 20X0, Columbia Inc. entered into an agreement with Scotia Ltd. to lease equipment with a useful life of 6 years. Columbia Inc. will make four equal payments of $132,000 at the beginning of each lease year. Columbia Inc. anticipates that the equipment will have a residual value of $90, 400 at the end of the lease, net of removal costs. Columbia Inc. has the option of extending the lease by (1) paying $90, 400 to retain the equipment or (2) allowing Scotia Ltd. to remove it. Scotia Ltd. 's implicit interest rate in this lease is 6% . Columbia Inc.'s incremental borrowing rate is 7% . Columbia Inc. depreciates the leased equipment on a straight-line basis. The lease commences on 1 January 20X1. Assume that the fair value of the equipment on the open market is greater than the present value of the lease payments. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare a lease liability amortization table for this…
A fixed-price-incentive -- firm target (FPIF) contract has a target cost of $100,000, a target profit of $15,000, a target price of $115,000, a ceiling price of $132,000, and a share arrangement of 80/20. If the seller does the work for $80,000 actual cost, how much profit does the buyer pay to the seller?
Stuart Corporation incurs the following annual fixed costs. Item Depreciation Officers' salaries Long-term lease Property taxes Cost $ 66,000 190,000 Units Produced Fixed cost per unit Required Determine the total fixed cost per unit of production, assuming that Stuart produces 10,000, 10,500, or 11,000 units. (Round your answers to 2 decimal places.) 50,000 11,000 10,000 10,500 11,000
A contractor is assembling a bid for a lump-sum building project. The summation of all task costs is $15,000,000. Annual company revenue is $400 million, and annual home office costs are $25 million. Total job office overhead is estimated to be $3 million and desired profit is 11%. Include O&P, what lump-sum price should the contractor bid?
ABC Co. estimates total contract costs at completion d In 20x2. ABC incurs actual costs of P2.45M and revizes its ABC completes the construction in 20x3 The actual total 6. In 20x1, ABC Co. enters into a contact with a customer for the uses the cost-to-cost method in measuring its progress on the estimate of total contract costs at completion to P4.6M. construction of a building. The contract price is P6M. ABC Co. me contract. cost of the contract is P4.5M. How much is the profit recognized in 20x3? a. 420,000 b. 450,000 c 500,000 d. 550,000
On 1 March 2020,the company entered into a lease agreement in order to lease a manufacturing machine with a costprice of R250 000 (VAT inclusive). The period of the lease is five years, and the useful life of the machinery is estimatedat six years. The following is an extract from the lease agreement:4.1.1 Ownership of the machinery will be transferred to the Lessee at the end of the lease.4.1.2 Should the Lessee cancel the lease, the Lessor’s losses will be borne by the Lessee.Monthly instalments are payable in arrears and amount to R5 947 (VAT inclusive). The company used themanufacturing machine for a qualifying purpose. The company is a registered VAT vendor.Required:Provide the deferred tax movement per the balance sheet method for the lease agreement for the financial year ending31 December 2021. Clearly indicate whether the movement represents an income or an expense. Note:- Show all calculations, marks are awarded for calculations.- You may round off to the nearest Rand.
Boat Brothers has been asked to refit a boat for a customer. Skilled labour costing £16 per hour will be required for the refit. The workers will have to be taken off the production of kayak for resale for a total of 480 hours. The kayak are sold for £400 each and take 24 hours of skilled labour. The material cost of each kayak is 120. What is the relevant cost when assessing the viability of the refit contract? OA. £5,600 OB. £8,000 OC. £3,840 OD. £1,760 Next
Show the solution in good accounting form
18. Questions 18 and 19 are based on the following information: Regine Company manufactures plugs used in its manufacturing cycle at a cost of Ph 36 per unit that includes Ph 8 of fixed overhead. Regine needs 30,000 of these plugs annually and Orlan Company has offered to sell these units to Regine at Ph 33 per unit. If Regine decides to purchase the plugs, Ph 60,000 of the annual fixed overhead applied will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. If Regine Company purchases the plugs but does not rent the unused facility, the company would * save Ph 3.00 per unit lose Ph 6.00 per unit save Ph 2.00 per unit lose Ph 3.00 per unit O O
"We TryNotToGetCaught Inc. (WT) is a specialty subcontractor with an EMR of 1.10. WT has been pre-qualified to participate in an important public bid for a project. You have estimated the following characteristics for WT and for two similarly structured and very strong competitors. Confirmed EMR information (from previous public bids) Estimated Annual Payroll (your "educated" guess-estimate) Estimated (Company Average) Workers Compensation "Base" Rate WT 1.1 $1,750,000 $1,850,000 Competitor A Competitor B 0.8 New Company 17.5% 18.0% $1,600,000 18.5% a. Calculate the annual WCI (Workers Compensation Insurance) premium that each of these companies would have to pay. Show your work Based on your findings in question a) what would you recommend to your company/boss? b.
Diaz Inc. develops website ads for customers. Contract terms and conditions are similar across its various contracts. Contracts typically include a fixed fee plus variable consideration for a performance bonus earned when the website ads are delivered ahead of schedule. Based on Diaz’s historical experience the bonus amounts and associated probability for achieving each bonus on a new customer’s contract are. Bonus Amount Probability of Outcome $0 15% $5,000 40% $10,000 45% If Diaz Inc. has $50,000 in website ads for customers what is the expected transaction price?