Problem 2 Revenue Recognition

Maddison Inc. entered into a contract to install a pipeline for a fixed price of $2,200,000. JRE uses the percentage-of-completion method of revenue recognition.

		Cost incurred		Estimated Cost to Complete
2015		$ 250,000		$ 1,550,000
2016		1,600,000		500,000
2017		450,000		0

In 2016, Maddison would report (rounded to the nearest thousand) gross profit (loss) of:

Problem 3 Ratio Analysis

The following information was taken from Moser & Companys 2015 annual report:

Net inventories reported on the balance sheet were $1,553 and 1,295 for years 2015 and 2014, respectively.

Replacement cost exceeded LIFO value by $978 and $1,054 for years 2015 and 2014, respectively.

Cost of goods sold for year 2015 was $8,936.1

The following information was extracted from BRAUNS Heavy Industries financial statements:

TIAPEI utilizes the FIFO cost flow assumption and its cost of goods sold for year 2015 was $5,266.5.

Inventory balances were $1,455 and 1,114 for years 2015 and 2014, respectively.

Required:

Calculate both firms inventory turnover ratio and indicate which one is better and why. Show all work. (NOT JUST MECHANICAL THINK BEFORE DOING ANY CALCULATIONS.)