Contract: Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights. Revenue recognized point of long term contract: A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date. If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete. The revenue recognition principle The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed. To determine: The cost of construction actually incurred in 2016.

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Answer 1

Question

Chapter 5, Problem 5.22E

Requirement – 1

To determine

Contract:

Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights.

Revenue recognized point of long term contract:

A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date.

If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

To determine: The cost of construction actually incurred in 2016.

Requirement – 2

To determine

The cash that was collected in 2016 on the contract.

Requirement – 3

To determine

The estimated cost to complete as of the end of 2016.

Requirement – 4

To determine

The estimated percentage of completion used to calculate revenue in 2016.

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Answer 2

Question

Chapter 5, Problem 5.22E

Requirement – 1

To determine

Contract:

Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights.

Revenue recognized point of long term contract:

A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date.

If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

To determine: The cost of construction actually incurred in 2016.

Requirement – 2

To determine

The cash that was collected in 2016 on the contract.

Requirement – 3

To determine

The estimated cost to complete as of the end of 2016.

Requirement – 4

To determine

The estimated percentage of completion used to calculate revenue in 2016.

Expert Solution & Answer

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Answer 3

Question

Chapter 5, Problem 5.22E

Requirement – 1

To determine

Contract:

Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights.

Revenue recognized point of long term contract:

A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date.

If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

To determine: The cost of construction actually incurred in 2016.

Requirement – 2

To determine

The cash that was collected in 2016 on the contract.

Requirement – 3

To determine

The estimated cost to complete as of the end of 2016.

Requirement – 4

To determine

The estimated percentage of completion used to calculate revenue in 2016.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 5.22E

Requirement – 1

To determine

Contract:

Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights.

Revenue recognized point of long term contract:

A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date.

If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

To determine: The cost of construction actually incurred in 2016.

Requirement – 2

To determine

The cash that was collected in 2016 on the contract.

Requirement – 3

To determine

The estimated cost to complete as of the end of 2016.

Requirement – 4

To determine

The estimated percentage of completion used to calculate revenue in 2016.

Expert Solution & Answer

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Answer 5

Chapter 5, Problem 5.22E

Requirement – 1

To determine

Contract:

Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights.

Revenue recognized point of long term contract:

A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date.

If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

To determine: The cost of construction actually incurred in 2016.

Requirement – 2

To determine

The cash that was collected in 2016 on the contract.

Requirement – 3

To determine

The estimated cost to complete as of the end of 2016.

Requirement – 4

To determine

The estimated percentage of completion used to calculate revenue in 2016.

Answer 6

Chapter 5, Problem 5.22E

Requirement – 1

To determine

Contract:

Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights.

Revenue recognized point of long term contract:

A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date.

If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

To determine: The cost of construction actually incurred in 2016.

Answer 7

Chapter 5, Problem 5.22E

Requirement – 1

To determine

Contract:

Contract is a written document that creates legal agreement between the parties for buying and selling the property. It is committed by the parties to perform their obligation and to enforce their rights.

Revenue recognized point of long term contract:

A long-term contract qualifies for revenue recognition over time. The seller can recognize the revenue as per percentage of the completion of the project, which is recognized as revenue minus cost of completion until date.

If a contract does not meet the performance obligation norm, then the seller cannot recognize the revenue till the project is complete.

The revenue recognition principle

The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.

To determine: The cost of construction actually incurred in 2016.

Answer 8

Requirement – 2

To determine

The cash that was collected in 2016 on the contract.

Answer 9

Requirement – 2

To determine

The cash that was collected in 2016 on the contract.

Answer 10

Requirement – 3

To determine

The estimated cost to complete as of the end of 2016.

Answer 11

Requirement – 3

To determine

The estimated cost to complete as of the end of 2016.

Answer 12

Requirement – 4

To determine

The estimated percentage of completion used to calculate revenue in 2016.

Answer 13

Requirement – 4

To determine

The estimated percentage of completion used to calculate revenue in 2016.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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The cash that was collected in 2016 on the contract.

The estimated cost to complete as of the end of 2016.

The estimated percentage of completion used to calculate revenue in 2016.

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Chapter 5 Solutions