You are the Senior Accountant for the Patty Corporation, which has several divisions. They each keep their own accounting books and have chosen the appropriate method of revenue recognition based on their operations.
Pat's Electronics Division
Pat's Electronics Division sells computers through agents in various cities. Agents send orders and down payments to our company. The division then ships the goods F.O.B. shipping point directly to the customers. Revenue is recognized at the point of sale.
Additional Financial Data
		Orders for fiscal year 2012	$ 3,000,000
		Down payments collected in 2012	$ 300,000
		Billed and shipped in 2012	$ 2,400,000
		Freight billed in 2012	$ 70,000
		Commissions paid to agents (after ship to customer)	10%
		Warranty returns as % of sales	1%
Pickle Construction Division
The Pickle Construction Division was working on one project for the 2012 fiscal year. They use the percentage of completion revenue recognition method.
Contract for new administration building
		Total contract amount	$ 60,000,000
		Contract grant date	August 14, 2012
		Construction began	September 1, 2012
		Estimated cost to complete at beginning of contract	$ 52,000,000
		Estimated time to complete project	2 years
As of Dec 31, 2012
		Construction costs incurred to date	$ 14,140,000
		Billings to date	$ 19,500,000
		Expected costs to complete	$ 36,360,000
Peace Book Distribution Division
Peace Book Distribution Division sells to national bookstores. Our division allows for up to 25% of sales in returns. For the past 4 years, returns have averaged 20%. We record revenue based on revenue recognition when the right of return exists.
		Total sales for 2012	$ 9,000,000
		Sales still available for return for six months	$ 2,000,000
		Actual returns on sales not returnable	21%
		2011 sales collected in 2012	$ 2,500,000
		2011 sales returned in 2012	19%
Required:
	(a) We have studied several methods of revenue recognition. Define and describe each of the following methods of revenue recognition and indicate whether each is in accordance with generally accepted accounting principles.
	- Point of sale
	- Completion-of-production
	- Percentage-of-completion
	- Installment-sales
	(b) Calculate the revenue to be recognized in fiscal year 2012 for each division of Patty Corporation in accordance with generally accepted accounting principles. Show all calculations for full credit.