Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts. Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract. (a) To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method. Given information: All the information related to W Company is provided in the question document.

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Chapter 18, Problem 9CA

To determine

Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts.

Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract.

(a)

To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method.

Given information: All the information related to W Company is provided in the question document.

To determine

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

To determine

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

To determine

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

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PLEASE HELP! NOTICE. THERE ARE FIVE CELLS ON THE LEFT SIDE TO FILL. THE DROPDOWN SHOWS THE OPTIONS FOR THESE CELLS.

Calm Ltd has the following data relating tò two investment projects, only one of which mayb e s e l e c t e d :The cost of capital is 10 per cent, and depreciation is calculated using straight line method.a . Calculate for each of the project:i. Average annual accounting rate of return on average capital investedi i . Net Present Valuei l l . I n t e r n a l R a t e o f Returnb. Discuss the relative merits of the methods of evaluation mentioned above in (a).Q.4a . In the context of process costing, discuss the following concepts briefly, i . Equivalent unitsNormal lossill. Abnormal lossi v. Joint productsV . By productsb . Discuss the different types of standard costing and objectives of standard costing.

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Answer 2

Question

Chapter 18, Problem 9CA

To determine

Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts.

Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract.

(a)

To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method.

Given information: All the information related to W Company is provided in the question document.

To determine

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

To determine

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

To determine

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

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Answer 3

Question

Chapter 18, Problem 9CA

To determine

Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts.

Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract.

(a)

To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method.

Given information: All the information related to W Company is provided in the question document.

To determine

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

To determine

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

To determine

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

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Answer 4

Question

Chapter 18, Problem 9CA

To determine

Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts.

Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract.

(a)

To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method.

Given information: All the information related to W Company is provided in the question document.

To determine

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

To determine

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

To determine

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

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Answer 5

Chapter 18, Problem 9CA

To determine

Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts.

Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract.

(a)

To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method.

Given information: All the information related to W Company is provided in the question document.

To determine

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

To determine

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

To determine

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

Answer 6

Chapter 18, Problem 9CA

To determine

Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts.

Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract.

(a)

To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method.

Given information: All the information related to W Company is provided in the question document.

Answer 7

Chapter 18, Problem 9CA

To determine

Percentage-of-completion method: It is a method where the incomes and expenses are recorded based on the percentage of the work is completed. This method is used for long term contracts.

Completed contract method: Under this method the revenue is not recognized over the project life but is recognized only upon the completion of the contract.

(a)

To explain: To explain the theoretical justification for W Company’s use of the percentage-of-completion method.

Given information: All the information related to W Company is provided in the question document.

Answer 8

To determine

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

Answer 9

To determine

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

Answer 10

To determine

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

Answer 11

To determine

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

Answer 12

To determine

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

Answer 13

To determine

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 18 - Prob. 1Q Ch. 18 - Prob. 2Q Ch. 18 - Prob. 3Q Ch. 18 - Prob. 4Q Ch. 18 - Prob. 5Q Ch. 18 - Prob. 6Q Ch. 18 - Prob. 7Q Ch. 18 - Prob. 9Q Ch. 18 - Prob. 10Q Ch. 18 - Prob. 11Q

Concept explainers

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.

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Chapter 18 Solutions

Concept explainers

(b) To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements. Given information: All the information related to W Company is provided in the question document.

(c) To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion. Given information: All the information related to W Company is provided in the question document.

(d) To discuss: To discuss the effect on earnings per share in the 2nd year. Given information: All the information related to W Company is provided in the question document.

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Chapter 18 Solutions

(b)

To determine the accounting for progress billings and discuss the classification of progress billing in W Company’s financial statements.

Given information: All the information related to W Company is provided in the question document.

(c)

To identify: To identify the income recognized in the second year of the 4-year contract can be determined using the cost-to-cost method of determining percentage of completion.

Given information: All the information related to W Company is provided in the question document.

(d)

To discuss: To discuss the effect on earnings per share in the 2nd year.

Given information: All the information related to W Company is provided in the question document.