1. (1 point) On March 1, 2014, Avengers Construction Company contracted to build a transport for Marvel Manufacturing Inc. for a total contract price of $188,000. The transport was completed by October 31, 2016. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Marvel for 2014, 2015 and 2016 are given below. 2014 2015 2016 Contract costs incurred during the year $31,500 $64,600 $61,100 Estimated costs to complete the contract at 12/31 143,500 58,900 0 Billings to Pie during the year 25,000 115,000 48,000 Collections from Pie during the year 17,000 65,000 106,000 Required: Assuming that Avengers uses the indicated accounting approach, provide the following amounts to be reported on their income statement: Percentage of Completion Completed Contract Cost Recovery Revenues reported in 2014 Expenses reported in 2015 Gross Profit (Loss) reported in 2015 Gross Profit (Loss) reported in 2016 2. (1 point) Due to the uncertainty surrounding collections, DC Comics appropriately uses the installment sales method of accounting to recognize income in its financial statements. The following information concerning normal sales on account is available: 2014 2015 Installment Sales 850,000 1,020,000 Cost of Installment Sales 722,500 826,200 Cash Collections on 2014 Sales 385,000 465,000 Cash Collections on 2015 Sales 490,000 Also in 2014, in addition to the sales transactions above, DC Comics sold equipment to Captain America, who signed an installment note agreeing to make four $15,000 payments on December 31, 2014, 2015, 2016, and 2017. The cost basis of the equipment was $37,500 and an 8% interest rate was appropriate for this transaction. Required: Provide the amount of gross profit/gain to be recognized in 2014 and 2015 for each transaction type: 2014 2015 Installment Sales (Gross Profit) Installment Note (Gain on Sale) NOTE: Remember to staple the paper(s) on which you did the work to this sheet. Acad

Chapter 18: Extra Credit Homework Opportunity (Spring '14) Name (Print): ___________________________ 1. (1 point) On March 1, 2014, Avengers Construction Company contracted to build a transport for Marvel Manufacturing Inc. for a total contract price of $188,000. The transport was completed by October 31, 2016. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Marvel for 2014, 2015 and 2016 are given below. 2014 $31,500 143,500 25,000 17,000 Contract costs incurred during the year Estimated costs to complete the contract at 12/31 Billings to Pie during the year Collections from Pie during the year 2015 $64,600 58,900 115,000 65,000 2016 $61,100 0 48,000 106,000 Required: Assuming that Avengers uses the indicated accounting approach, provide the following amounts to be reported on their income statement: Percentage of Completion Completed Contract Cost Recovery Revenues reported in 2014 Expenses reported in 2015 Gross Profit (Loss) reported in 2015 Gross Profit (Loss) reported in 2016 2. (1 point) Due to the uncertainty surrounding collections, DC Comics appropriately uses the installment sales method of accounting to recognize income in its financial statements. The following information concerning normal sales on account is available: 2014 2015 Installment Sales 850,000 1,020,000 Cost of Installment Sales 722,500 826,200 Cash Collections on 2014 Sales 385,000 465,000 Cash Collections on 2015 Sales 490,000 Also in 2014, in addition to the sales transactions above, DC Comics sold equipment to Captain America, who signed an installment note agreeing to make four $15,000 payments on December 31, 2014, 2015, 2016, and 2017. The cost basis of the equipment was $37,500 and an 8% interest rate was appropriate for this transaction. Required: Provide the amount of gross profit/gain to be recognized in 2014 and 2015 for each transaction type: 2014 2015 Installment Sales (Gross Profit) Installment Note (Gain on Sale) NOTE: Remember to staple the paper(s) on which you did the work to this sheet. Academic Integrity Certification By signing below, I certify that while I may have legitimately worked with another student, I did not simply copy another student's work or allow another student to simply copy my work. _________________________________ Signature