Question
can someone please help me with this? 5. In year 1, Southern Construction agrees to construct a school building for $12,000,000, receiving payments for the
can someone please help me with this?
5. In year 1, Southern Construction agrees to construct a school building for $12,000,000, receiving payments for the work of $6,000,000 in both year 1 and year 2. Southern estimates that the costs will be $4,000,000 in Year 1 and $6,000,000 in Year 2.
Question: If Southern uses the percentage-of-completion method (based on total costs), what amount of profit is recognized in each year of the contract?
Year 1 Year 2
a. | $0 $2,000,000 |
b. | $2,000,000 $0 |
c. | $1,000,000 $1,000,000 |
d. | $800,000 $1,200,000 |
e. | $2,000,000 $1,000,000 |
Healthy Lawn Maintenance Company
Healthy Lawn Maintenance Company started a lawn services business on January 1, 2013. It sends invoices to its customers for lawn maintenance services at the end of each month, and expects the customer to pay within 30 days. During 2013, Healthy Lawn Maintenance billed its customers a total of $2,000,000 for services rendered during the year. It made journal entries at the end of each month.
6. (Use the Healthy Lawn information to answer this question.)
Question: What is the aggregate effect of these entries during 2013?
a. | Sales Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 Accounts Receivable, Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 |
b. | Sales Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 Accounts Receivable, Net . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 2,000,000 |
c. | Accounts Receivable, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 Sales Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 |
d. | Accounts Receivable, Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 Sales Revenue . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2,000,000 |
e. | Notes Receivable, Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 Sales Revenue . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 2,000,000 |
7. Assume that Healthy Lawn Maintenance estimates that it will not collect 2% of total credit sales in a given month. At the end of each month, it makes an adjusting entry.
Question: What is the aggregate effect of these entries during 2013?
a. | Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Accounts Receivable, net. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 40,000 |
b. | Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 |
c. | Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 40,000 |
d. | Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Accounts Receivable, gross . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 40,000 |
e. | Accounts Receivable, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 |
8.
Question: If Healthy Lawn Maintenances customers remitted $1,900,000 in cash during 2013,what would be the journal entries with the following aggregated amounts:
a. | Accounts Receivable, Grossspecific accounts . . . . . . . . . . . . . 1,900,000 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. 1,900,000 |
b. | Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1,900,000 Accounts Receivable, netspecific accounts . . . . . . . . . . .. . . . . . . 1,900,000 |
c. | Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1,900,000 Accounts Receivable, Grossspecific accounts . . . . . . . . . . . . . . . . 1,900,000 |
d. | Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1,900,000 Notes Receivable, Grossspecific accounts . . . . . . . . . . . . . . . . . . . 1,900,000 |
e. | Notes Receivable, Grossspecific accounts . . . . . . . . . . . . . . . . . . 1,900,000 Cash . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1,900,000 |
9. Healthy Lawn Maintenance deems uncollectible any customer account not paid after six months. This means that every accounting period, Healthy Lawn Maintenance ascertains which accounts remained uncollected for six months, and treats these customer accounts as uncollectible by writing them off. If, during 2013,
Question: If Healthy Lawn Maintenance identified accounts of specific customers totaling $20,000 with unpaid balances for six months and wrote them off, what would the journal entry be?:
a. | Bad Debt Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Accounts Receivablegross . . . . . . . . . . . . . . . . . . . . . . . . 20,000 |
b. | Bad Debt Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20,000 Accounts Receivablespecific accounts . . . . . . . . . . . . . . . . 20,000 |
c. | Allowance for Uncollectibles . . . .. . .. . .. . .. . .. . .. . .. . .. . .. 20,000 Accounts Receivablespecific accounts . . . . . . . . . . . . . . . . 20,000 |
d. | Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . 20,000 Accounts Receivablegross . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 |
e. | Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . .20,000 Bad Debt Expenses . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 |
10. The 2013 year-end balance in Accounts Receivable, Gross, for Healthy Lawn Maintenance is $1,085,000 An aging of these accounts receivable shows that the estimated uncollectible amount is $24,200. Before aging the accounts, the Allowance for Uncollectibles has a debit balance of $15,000 from writing off actual accounts during 2013.
Question: What would be the adjusting entry at the end of 2013 to obtain a credit balance in the Allowance for Uncollectibles of $24,200?
a. | Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,200 Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,200 |
b. | Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,200 Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,200 |
c. | Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,200 Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,200 |
d. | Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,200 Allowance for Uncollectibles . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 39,200 |
e. | Allowance for Uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 Bad Debt Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 |
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