Student Name: Nurul Anisa

Class: F
Problem 05-02

Requirement 1:

2011 Cost recovery %:

$180,000
$300,000 = 60% Gross profit % =

2012 Cost recovery %:

$280,000
$400,000 = 70% Gross profit % =

2011 Gross Profit:

Cash collection from 2011 sales = $120,000 X 40% =

2012 Gross Profit:

Cash collection from 2011 sales = $100,000 X 40% =

Cash collection from 2012 sales = $150,000 X 30% =
Total 2012 gross profit

Requirement 2:

Date Account Debit Credit

2011 To record installment sales
Installment receivables 300,000 Correct!
Inventory 180,000
Deferred gross profit 120,000

2011 To record cash collections from installment sales

Cash 120,000
Installment receivables 120,000 Correct!

2011 To recognize gross profit from installment sales

Deferred gross profit 48,000
Realized gross profit 48,000 Correct!

2012 To record installment sales

Installment receivables 400,000 Correct!
Inventory 280,000
Deferred gross profit 120,000

2012 To record cash collections from installment sales

Cash 250,000
 Installment receivables 250,000 Correct!

2012 To recognize gross profit from installment sales

Deferred gross profit 85,000
Realized gross profit 85,000 Correct!
Requirement 3:

Date Cash Collected Cost Recovery

2011
2011 sales $120,000 $120,000

2012
2011 sales $100,000 $60,000
2012 sales 150,000 150,000
2012 totals $250,000 $210,000

Date Account Debit Credit

2011 To record installment sales
Installment receivables 300,000 Correct!
Inventory 180,000
Deferred gross profit 120,000

2011 To record cash collections from installment sales

Cash 120,000
Installment receivables 120,000 Correct!

2012 To record installment sales

Installment receivables 400,000 Correct!
Inventory 280,000
Deferred gross profit 120,000

2012 To record cash collections from installment sales

Cash 250,000
Installment receivables 250,000 Correct!

2012 To recognize gross profit from installment sales

Deferred gross profit 40,000
Realized gross profit 40,000 Correct!
Nurul Anisa
F
Problem 05-02

40% Correct!

30% Correct!

$48,000 Correct!

$40,000
45,000
$85,000 Correct!

Correct!

Correct!
Correct!

Correct!
 Gross Profit

0 Correct!

$40,000
0
$40,000 Correct!

Correct!

Correct!

Correct!
Given Data P05-02:

AJAX COMPANY

Installment Sales 2011 2012

Sales $ 300,000 $ 400,000
Cost of sales 180,000 280,000
Customer collections on:
2011 sales 120,000 100,000
2012 sales 150,000
 Student Name: Nurul Anisa
Class: F
Problem 05-03

Requirement 1:
SILVA COMPANY
Gross Profit Recognized

Total profit $ 200,000

Installment sales method: Gross profit % 40%

8/31/2011 8/31/2012 8/31/2013 8/31/2014 8/31/2015

Cash collections $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Point of delivery method $ 200,000 $ - $ - $ - $ -
Installment sales method $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000
Cost recovery method $ - $ - $ - $ 100,000 $ 100,000

Requirement 2:
SILVA COMPANY
General Journal

Point of Delivery Installment Sales Cost Recove

Account Debit Credit Debit Credit Debit
Installment receivable 500,000
Sales revenue 500,000
Cost of goods sold 300,000
Inventory 300,000
To record sale on 8/31/11.

Installment receivable 500,000 500,000

Inventory 300,000
Deferred gross profit 200,000
To record sale on 8/31/11.

Cash 100,000 100,000 100,000

Installment received 100,000 100,000
Entry made each Aug. 31.

Deferred gross profit 40,000

Realized gross profit 40,000
Entry made each Aug. 31.

Deferred gross profit 100,000

Realized gross profit
Entry made 8/31/14 & 8/31/15.
 Student Name: Nurul Anisa
Class: F
Problem 05-03

Requirement 3:
SILVA COMPANY
Partial Balance Sheet

Point of Installment Cost

Delivery Sales Recovery
December 31, 2011
Assets
Installment receivable 400,000 400,000 400,000
Less deferred gross profit 160,000 200,000
Installment receivables, net 240,000 200,000

December 31, 2012

Assets
Installment receivable 300,000 300,000 300,000
Less deferred gross profit 120,000 200,000
Installment receivables, net 180,000 100,000
A COMPANY
eral Journal

Cost Recovery
Credit

300,000
200,000

100,000

100,000
Given Data P05-03:

SILVA COMPANY

Merchandise sold $ 500,000

Down payment $ 100,000
Annual installments (4) $ 100,000
Book value of merchandise $ 300,000
 Student Name: Nurul Anisa
Class: F
Problem 05-05

WESTGATE CONSTRUCTION COMPANY

Requirement 1:
Gross profit to be recognized 2011 2012 2013
Contract price $ 10,000,000 $ 10,000,000 $ 10,000,000
Actual costs to date 2,400,000 6,000,000 8,200,000
Estimated costs to complete 5,600,000 2,000,000 -
Total estimated costs 8,000,000 8,000,000 8,200,000
Estimated gross profit (loss) $ 2,000,000 $ 2,000,000 $ 1,800,000
Correct! Correct! Correct!

Gross profit (loss) 2011 2012 2013

recognition: $ 600,000 $ 900,000 $ 300,000
Correct! Correct! Correct!

Requirement 2:
WESTGATE CONSTRUCTION COMPANY
General Journal

2011 2012 2013

Account Debit Credit Debit Credit Debit
Construction in progress 2,400,000 3,600,000 2,200,000
Various accounts 2,400,000 3,600,000
To record construction costs.

Accounts receivable 2,000,000 4,000,000 4,000,000

Billings on construction contract 2,000,000 4,000,000
To record progress billings.

Cash 1,800,000 3,600,000 4,600,000

Accounts receivable 1,800,000 3,600,000
To record cash collections

Construction in progress 600,000 900,000 300,000

Cost of construction 2,400,000 3,600,000 2,200,000
Rev. from long-term contracts 3,000,000 4,500,000
To record gross profit.

Requirement 3:
WESTGATE CONSTRUCTION COMPANY
Partial Balance Sheet

2011 2012
Current assets:
Accounts receivable $ 200,000 $ 600,000
Construction in progress $ 3,000,000 $ 7,500,000
Less: Billings (2,000,000) (6,000,000)
Costs and profit in excess $ 1,000,000 $ 1,500,000
of billings
 Student Name: Nurul Anisa
Class: F
Problem 05-05

Requirement 4:
2011 2012 2013
Costs incurred during year $ 2,400,000 $ 3,800,000 $ 3,200,000
Estimated cost to complete
as of year-end 5,600,000 3,100,000 -

2011 2012 2013

Contract price $ 10,000,000 $ 10,000,000 $ 10,000,000
Actual costs to date 2,400,000 6,200,000 9,400,000
Estimated costs to complete 5,600,000 3,100,000 -
Total estimated costs 8,000,000 9,300,000 9,400,000
Estimated gross profit (loss) $ 2,000,000 $ 700,000 $ 600,000
Correct! Correct! Correct!

Gross profit (loss) 2011 2012 2013

recognition: $ 600,000 $ (133,333) $ 133,333
Correct! Correct! Correct!

Requirement 5:
2011 2012 2013
Costs incurred during year $ 2,400,000 $ 3,800,000 $ 3,900,000
Estimated cost to complete
as of year-end 5,600,000 4,100,000 -

2011 2012 2013

Contract price $ 10,000,000 $ 10,000,000 $ 10,000,000
Actual costs to date 2,400,000 6,200,000 10,100,000
Estimated costs to complete 5,600,000 4,100,000 -
Total estimated costs 8,000,000 10,300,000 10,100,000
Estimated gross profit (loss) $ 2,000,000 $ (300,000) $ (100,000)
Correct! Correct! Correct!

Gross profit (loss) 2011 2012 2013

recognition: $ 600,000 $ (900,000) $ 200,000
Correct! Correct! Correct!
NSTRUCTION COMPANY
eral Journal

2013
Credit

2,200,000

4,000,000

4,600,000

2,500,000
Given Data P5-05:

WESTGATE CONSTRUCTION COMPANY

Contract information:
Contract amount $10,000,000

2011 2012 2013

Cost incurred during the year $ 2,400,000 $ 3,600,000 $ 2,200,000
Estimated costs to complete as of year-end 5,600,000 2,000,000 -
Billings during the year 2,000,000 4,000,000 4,000,000
Cash collections during the year 1,800,000 3,600,000 4,600,000

Costs incurred and costs to complete information (Part 4):

2011 2012 2013

Costs incurred during the year $ 2,400,000 $ 3,800,000 $ 3,200,000
Estimated costs to complete as of year-end 5,600,000 3,100,000 -

Costs incurred and costs to complete information (Part 5):

2011 2012 2013

Costs incurred during the year $ 2,400,000 $ 3,800,000 $ 3,900,000
Estimated costs to complete as of year-end 5,600,000 4,100,000 -