1- 3.Imar Construction company signed a contract to build new bridge at a contract price of $5,000,000 and total estimated cost of $4,000,000 the project will be completed within 4 years, the cost incurred to date for each period is, first year $1,000,000- second year $2,500,000- third year $3,200,000 and fourth year $4,100,000 while the estimasted cost to, complete the project for each each period is, first year $3,000,000- second year $1,700,000- third year $1,000,000 and fourth year is $0, based on above question and using percentage of completion method, what is the gross profit recognized in last year?

a.

$289,426.

b.

$290,476.

c.

$320,215.

d.

$133,333.

2- 5. Imar Construction company signed a contract to build new bridge at a contract price of $5,000,000 and total estimated cost of $4,000,000 the project will be completed within 4 years, the cost incurred to date for each period is, first year $1,000,000- second year $2,500,000- third year $3,200,000 and fourth year $4,100,000 while the estimasted cost to, complete the project for each each period is, first year $3,000,000- second year $1,700,000- third year $1,000,000 and fourth year is $0, based on above question and using percentage of completion method, what is the required journal entry in second year?

a.

Debit Construction in process $1,0000,000, Cash $1,000,000.

b.

Debit Construction in process $1,500,000, credit cash, payable $1,500,000.

c.

No entry is required.

d.

Debit Construction in process $2,500,000, cash 2,500,000.

3- Swift Corp., a capital goods manufacturing business that started on January 4, 2019, and operates on a calendar-year basis, uses the cost recovery method of profit recognition in accounting for all its sales. The following data were taken from the 2019 and 2020 records.

2019 2020

Installment sales $800,000 $1,000,000

Cost of sales $600,000 $700,000

Cash collections on sales of 2019 $500,000 $300,000

Cash collections on sales of 2020 0 $600,000

Instructions: Using cost recovery method

(a) Compute the amount of realized gross profit to be recognized in each year

(b) State where the balance of Unrealized Gross Profit in each year

4- During 2018 Jana Company started a construction job with a contract price of $2,000,000. The job was completed in 2020. The following information is available.

2017 2018 2019

Costs incurred to date $500,000 $1,100,000 $1,600,000

Estimated costs to complete $1,00,000 $600,000 0

Billings to date 300,000 900,000 1,600,000

Collections to date 270,000 810,000 1,425,000

Instructions

(a) Compute the amount of gross profit to be recognized each year assuming the cost recovery method is used.

(b) Prepare all necessary journal entries for 2019.

(c) Compare the realized gross profit for each period between percentage of completion method and cost recovery method

5- 9. installment sales for 2018 is $600,000 and cost of goods sold $300,000 while the installment sales in 2019 is $1,000,000 and cost of goods sold $800,000, cash collection from 2018 sales was $400,000 in 2018 and $200,000 in 2019, cash collection from 2019 sales was $500,000 in 2019 and $500,000 in 2020, using installment sales method compute gross profit rate for two years sales?

a.

2018 is 20% and2019 is 20%.

b.

2018 is 20% and 2019 is 50%.

c.

2018 is 50% and 2019 is 20%.

d.

2018 is 50% and 2019 is 50%.

6- 13. installment sales for 2018 is $600,000 and cost of goods sold $300,000 while the installment sales in 2019 is $1,000,000 and cost of goods sold $800,000, cash collection from 2018 sales was $400,000 in 2018 and $200,000 in 2019, cash collection from 2019 sales was $500,000 in 2019 and $500,000 in 2020, using installment sales method compute Unrealized gross in 2019?

a.

$200,000.

b.

$100,000.

c.

$150,000.

d.

$300,000.

7- 10. installment sales for 2018 is $600,000 and cost of goods sold $300,000 while the installment sales in 2019 is $1,000,000 and cost of goods sold $800,000,cash collection from 2018 sales was $400,000 in 2018 and $200,000 in 2019, cash collection from 2019 sales was $500,000 in 2019 and $500,000 in 2020, using installment sales method compute gross profit realized in 2018?

a.

$300,000.

b.

$400,000.

c.

$200,000.

d.

$40,000.