45,000,000 45,000,000 54,000,000 $180,000,000 2012 24,000 $120,000,000 a. Cal culate the amount of revenue, expense, and net income for each of the four years under the following revenue recognition methods (1) Pe rcentage-of-completion method (2) Completed contract method. b. Sh ow the journal entries Flanikin will make in 2010, 2011, 2012, and 2013 for this con- tract. Flanikin accumulates contract costs in a Contract in Process account. Although th e costs involve a mixture of cash payments, credits to assets, and credits to liability accounts, assume for purposes of this problem that all costs are recorded as credits to Accounts Payable. e. Which method do you believe provides the better measure of Flanikin Construction Company's performance under the contract? Why 49. Income recognition when collection from the customer is uncertain. Furniture Retailers sells furniture to retail customers, offering extended payment terms. In January 2013, a customer buys a full set of dining room and living room furniture for $8,400 on an installment plan with no down payment and monthly payments of $400, beginning January 31, 2013. The cost of the furniture to Furniture Retailers is $6,800. Furniture Retailers classifies Deferred Gross Margin as a liability on its balance sheet. Ignore interest on unpaid accounts receiv- able. What journal entries will Furniture Retailers make (1) at the time of sale in January 2013 and (2) when it receives each monthly payment from the customer under each of the following methods of recognizing revenue a. Installment method. b. Cost recovery method. 50. Revenue recognition when collection is uncertain. Appliance Sales and Service sells major household appliances to retail customers, offering extended payment terms. Its fiscal year ends on June 30. In July of 2013, a customer bought a freezer, a refrigerator, and a con- vection oven on an installment plan, with no down payment and 10 monthly payments of hdu 31 2013 The gross margin percentage on this arrangement is 9%