ACC 421 Week 3 Individual Assignment P1 P2 P3 And P4

Submit responses to the individual assignment for week 3 posted in the Course-Materials forum.

Problem 1:

Grading: This problem is worth a total of 18.75 points. There are 23grading elements each worth 18.75 x 2/3 / 23 = 0.5435 points. There are 18.75 x 1/3 = 6.25 points available for effort.

The following are general ledger balances of the RTQ Company as of December 31, 2013:

Cost of goods sold $585,000

Fair Market Value appreciation on land above cost 42,000

Cash dividends declared and paid 32,000

Rental revenue 32,000

Administrative salaries 86,000

Sales salaries 92,000

Sales supplies expense 22,000

Interest expense on notes payable 50,000

Depreciation expense on sales related assets 34,000

Depreciation expense on administrative related assets 46,000

Other administrative expense 22,000

Net sales 1,078,000

Income tax 42,000

The company had 49,000 shares of common stock issued and outstanding during the entire year.

The company ends its fiscal accounting year on December 31.

Instructions:

A: Prepare a multiple-step income statement in good form.

B: Prepare a single-step income statement in good form.

Problem 2:

Grading: This problem is worth a total of 18.75 points. There are 22grading elements each worth 18.75 x 2/3 / 22 = 0.5682 points. There are 18.75 x 1/3 = 6.25 points available for effort.

The following information pertains to the BBR Company for the year ending December 31, 2010:

Administrative expenses $303,000

Cash dividends declared 189,000

Cost of goods sold 1,074,000

Extraordinary gain 120,000

Extraordinary loss 76,000

Income tax applicable to continuing operations 236,200

Income tax applicable to extraordinary gain 40,800

Income tax applicable to extraordinary loss 25,700

Income tax applicable to discontinued operations 32,200

Loss on discontinued operations 95,000

Rent revenue 51,000

Retained earnings, January 1, 2010 758,000

Sales 2,400,000

Selling expenses 379,000

Unrealized holding gain on available-for-sale securities 19,000

Common shares outstanding during 2010 126,000

Instructions:

A: Prepare a single-step income statement for 2010.

B: Prepare a retained earnings statement for 2010.

C: Show how comprehensive income is reported using the second income statement format.

The company ends its fiscal accounting year on December 31.

Problem 3:

Grading: This problem is worth a total of 18.75 points. There are 16grading elements each worth 18.75 x 2/3 / 16= 0.7813 points. There are 18.75 x 1/3 = 6.25 points available for effort.

The PNK Company is in the business of construction. In 2016 it negotiated a contract with the TAT Company to build a new factory building for the TAT Company. The negotiated total contract price of the factory building was agreed to be $5,200,000 As the construction progressed through completion, the following information was compiled:

2016 2017 2018

Contract billings to date $1,040,000 $3,120,000 $5,200,000

Collections to date 936,000 2,808,000 4,940,000

Costs incurred to date 1,387,000 3,241,000 3,709,000

Estimated costs to complete 2,080,000 572,000 0

Instructions:

A. Assuming that the PNK Company uses the percentage-of-completion method to account for long term contracts:

1. For each year, compute the amount of gross profit that should be recognized.

2. Prepare all necessary journal entries that the PNK Company should record for 2017.

B. Assuming that the PNK Company uses the completed-contract method to account for long term contracts:

1. For each year, compute the amount of gross profit that should be recognized.

The PNK Company closes it fiscal accounting year on December 31.

Problem 4:

Grading: This problem is worth a total of 18.75 points. There are 5grading elements each worth 18.75 x 2/3 / 5 = 2.5000 points. There are 18.75 x 1/3 = 6.25 points available for effort.

The KDG Company constructs buildings. It entered into a three-year contract in 2014 to construct a building for a total contract price of $2,500,000 The company uses the percentage-of- completion method to recognize income under long term construction contracts; and recognizes income each year based on the proportion of cost incurred to the total estimated costs for the contract.

Financial statement information pertaining to the contract as of December 31, 2014 follows:

Income Statement

Income recognized $45,500

Balance Sheet

Accounts receivable $53,800

Construction in progress$162,500

Less: Contract billings153,800

Cost of uncompleted contract in excess of billings 8,700

Instructions:

A. Compute the initial estimated total income on this contract?

B. Compute the total amount actually collected on this contract in 2014.

The company ends it fiscal accounting year on December 31.

Note: Ignore the effect of income taxes.

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