Jan 1, 2021) Toll Brothers began operation in 2021 and sold 1 million shares of common stocks $10 per share Jan 1, 2021) Borrowed $10 million from a local bank and wrote a 10 year notes with 12 annual interest payable on Dec 31 of each year Jan 1, 2021) Purchased construction materials from a manufacturer for $5 million in cash Jan 1, 2021) received a contract to build an office building for $4 5 million Harding will construct the building according to specifications provided by the buyer, and the project is estimated to take three years to complete According to the contract, Harding will bill the buyer $1 5 million per year in installments over the construction period according to a prearranged schedule Information related to the contract is as follows (in $thou) 2021 2022 2023 Construction costs incurred during the year 1,100 900 1,200 Construction costs incurred in prior years 0 1100 2300 Cumulative actual construction costs 1100 2000 3500 Estimated costs to complete at end of year 1,900 1,100 0 Total estimated and actual construction costs 3000 3100 3500 Total estimated revenue 4,500 4,500 4,500 Billings made during the year 1,500 1,500 1,500 Cash Collections during the year 1,200 1,600 1,700 Jan 1, 2022) Sold 2 million common stock shares $30 per share Sep 1, 2022) Repurchased 1 million common stock shares $50 per share and kept them as treasury stocks Mar 1, 2023) Repurchased 1 million common stock shares $40 per share and retired them In 2022 and 2023, there was no other transaction except for the long term construction in progress Income tax expense was 25 of income from operation The tax payment to IRS, which is assumed to be the same as income tax expense, is recorded as income tax payable at the end of the year and is due next Feb Billings are made on Jan 1 of each year Cash is collected on Feb 1 of each year Revenues costs are recognized on Dec 31 of each year, if there is any revenue cost to recognize for the project Assume Toll Brothers uses the upon completion method Make journal entries for 2021 2023 Prepare the balance sheets for 2021 2023 Calculate the basic EPS for 2012 2013 Assume Toll Brothers uses the completion method Make journal entries for 2021 2013 Prepare the balance sheets for 2021 2013 Calculate the basic EPS for 2012 2013

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 30, 2024

Jan 1, 2021) Toll Brothers began operation in 2021 and sold 1 million shares of common stocks @$10 per share. Jan 1, 2021) Borrowed $10

Jan 1, 2021) Toll Brothers began operation in 2021 and sold 1 million shares of common stocks @$10 per share.

Jan 1, 2021) Borrowed $10 million from a local bank and wrote a 10-year notes with 12% annual interest payable on Dec 31 of each year.

Jan 1, 2021) Purchased construction materials from a manufacturer for $5 million in cash.

Jan 1, 2021) received a contract to build an office building for $4.5 million. Harding will construct the building according to specifications provided by the buyer, and the project is estimated to take three years to complete. According to the contract, Harding will bill the buyer $1.5 million per year in installments over the construction period according to a prearranged schedule. Information related to the contract is as follows.

(in $thou)	2021	2022	2023
Construction costs incurred during the year	1,100	900	1,200
Construction costs incurred in prior years	0	1100	2300
Cumulative actual construction costs	1100	2000	3500
Estimated costs to complete at end of year	1,900	1,100	0
Total estimated and actual construction costs	3000	3100	3500
Total estimated revenue	4,500	4,500	4,500
Billings made during the year	1,500	1,500	1,500
Cash Collections during the year	1,200	1,600	1,700

Jan 1, 2022) Sold 2 million common stock shares @$30 per share.

Sep 1, 2022) Repurchased 1 million common stock shares @$50 per share and kept them as treasury stocks.

Mar 1, 2023) Repurchased 1 million common stock shares @$40 per share and retired them.

*In 2022 and 2023, there was no other transaction except for the long-term construction in progress.

* Income tax expense was 25% of income from operation. The tax payment to IRS, which is assumed to be the same as income tax expense, is recorded as income tax payable at the end of the year and is due next Feb.

*Billings are made on Jan 1 of each year. Cash is collected on Feb 1 of each year.

*Revenues/costs are recognized on Dec 31 of each year, if there is any revenue/cost to recognize for the project.

Assume Toll Brothers uses the upon completion method.
1. Make journal entries for 2021-2023.
2. Prepare the balance sheets for 2021-2023.
3. Calculate the basic EPS for 2012-2013

Assume Toll Brothers uses the % completion method.
1. Make journal entries for 2021-2013.
2. Prepare the balance sheets for 2021-2013.
3. Calculate the basic EPS for 2012-2013