© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
340/1,700
(0.20)
238/1,700
(0.14)
238/1,700
(0.14)
238/1,700
238/1,700
238/1,700
17
12
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
+20 +20
8-43Solutions
8.47 b. continued.
2013
Assets = Liabilities +
Shareholders’
Equity (Class.)
+340
–340
…….
Advances from C
us
tom
er
…………………………………..
20
Receivable from
Sales Revenue
Sales Revenue
280
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
2014–2018
Assets = Liabilities +
Shareholders’
Equity (Class.)
…….
Receivable from
Sales Revenue
Sales Revenue
180
………………………………………………
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Solutions8-448.47 b. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
2. Completed Contract Method
2012
December 20, 2012: At time of contract signing.
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
+20 +20
8-45Solutions
8.47 b. continued.
2013
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
+100 +100
2014–2018
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
+100 +100
2019
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Solutions8-46
8.47 b. continued.
Ca
sh
…………………………………………………………
……..
1,380
Advances from C
us
tom
er
…………………………………..
620
Sales Revenue
………………………………………………
2,00
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+1,380 –620 +2,000
IncSt
RE
Assets = Liabilities +
Shareholders’
Equity (Class.)
8.48 (Flanikin Construction Company; income recognition for a
contractor.) (amounts in US$)
a. Calculation of Revenues, Expenses, and Income
1. Percentage-of-Completion Method
Incremental
Percentage Revenue Expenses
Year Complete Recognized Recognized Income
2010
12/120
(0.10)
$
18,000,000
$
12,000,000
$ 6,000,00
0
2011
36/120
(0.30)
54,000,00
0
36,000,00
0
18,000,00
0
2012
48/120
(0.40)
72,000,00
0
48,000,00
0
24,000,00
0
2013
2
4
/
12
0
(
0
. 2
0
)
3
6
, 00
0
, 00
2
4
, 00
0
, 00
1
2
, 00
0
, 00
0
Total…….
1
2
0
/ 12
0
(
1
. 0
0
)
$
18
0
, 00
0
, 00
0
$
12
0
, 00
0
, 00
0
$
6
0
, 00
0
, 00
0
2. Completed Contract Method
Revenue Expenses
Year Recognized Recognized Income
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
8-49Solutions
8.48 b. continued.
Ca
sh
…………………………………………………………..
54
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
+36 +36
Solutions8-50
8.48 b. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)
+45 +45
2012
Assets = Liabilities +
Shareholders’
Equity (Class.)
+48 +48
Assets = Liabilities +
Shareholders’
Equity (Class.)
+45 +45
2013
Assets = Liabilities +
Shareholders’
Equity (Class.)
+24 +24
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
8-51Solutions
8.48 b. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
+20 +20
8-43Solutions
8.47 b. continued.
2013
Assets = Liabilities +
Shareholders’
Equity (Class.)
+340
–340
…….
Advances from C
us
tom
er
…………………………………..
20
Receivable from
280
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
2014–2018
Assets = Liabilities +
Shareholders’
Equity (Class.)
…….
Receivable from
180
………………………………………………
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Solutions8-448.47 b. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
2. Completed Contract Method
2012
December 20, 2012: At time of contract signing.
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
+20 +20
8-45Solutions
8.47 b. continued.
2013
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
+100 +100
2014–2018
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
+100 +100
2019
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
Solutions8-46
8.47 b. continued.
Ca
sh
…………………………………………………………
……..
1,380
Advances from C
us
tom
er
…………………………………..
620
Sales Revenue
………………………………………………
2,00
0
Assets = Liabilities +
Shareholders’
Equity (Class.)
+1,380 –620 +2,000
IncSt
RE
Assets = Liabilities +
Shareholders’
Equity (Class.)
8.48 (Flanikin Construction Company; income recognition for a
contractor.) (amounts in US$)
a. Calculation of Revenues, Expenses, and Income
1. Percentage-of-Completion Method
Incremental
Percentage Revenue Expenses
Year Complete Recognized Recognized Income
2010
12/120
(0.10)
$
18,000,000
$
12,000,000
$ 6,000,00
0
2011
36/120
(0.30)
54,000,00
0
36,000,00
0
18,000,00
0
2012
48/120
(0.40)
72,000,00
0
48,000,00
0
24,000,00
0
2013
2
4
/
12
0
(
0
. 2
0
)
3
6
, 00
0
, 00
2
4
, 00
0
, 00
1
2
, 00
0
, 00
0
Total…….
1
2
0
/ 12
0
(
1
. 0
0
)
$
18
0
, 00
0
, 00
0
$
12
0
, 00
0
, 00
0
$
6
0
, 00
0
, 00
0
2. Completed Contract Method
Revenue Expenses
Year Recognized Recognized Income
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
Assets = Liabilities +
Shareholders’
Equity (Class.)
8-49Solutions
8.48 b. continued.
Ca
sh
…………………………………………………………..
54
© 2013 Cengage Learning. All
r
ights reserved. No
d
is
t
r
ibution allowed without express
a
u
t
hor
ization.
Assets = Liabilities +
Shareholders’
Equity (Class.)
+36 +36
Solutions8-50
8.48 b. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)
+45 +45
2012
Assets = Liabilities +
Shareholders’
Equity (Class.)
+48 +48
Assets = Liabilities +
Shareholders’
Equity (Class.)
+45 +45
2013
Assets = Liabilities +
Shareholders’
Equity (Class.)
+24 +24
………………………………………………
Assets = Liabilities +
Shareholders’
Equity (Class.)
8-51Solutions
8.48 b. continued.
Assets = Liabilities +
Shareholders’
Equity (Class.)