![Brief Exercise 6-1 (Algo) Revenue recognition at a point in time (L06-2] On July 1, 2021. Apache Company, a real estate devel](http://img.homeworklib.com/questions/2a0b45c0-70a3-11ea-a1e2-110ec6e6bd28.png?x-oss-process=image/resize,w_560)
Homework Answers
| 2021 | 2022 | |
| Revenue | $2,880,000 | 0 |
Explanation: Revenue is to be recognized at the point when the transfer took place. Therefore, full revenue should be recognized in 2021 because transfer of land to construction company is done in 2021. There will be no revenue recognition in year 2022.
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Brief Exercise 6-1 (Algo) Revenue recognition at a point in time (L06-2] On July 1, 2021....
On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to...
On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,200,000. The book value of the land on Apache's books was $1,800,000. Terms of the sale required a down payment of $300,000 and 13 annual payments of $300,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2022. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at...
On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to...
On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,370,000. The book value of the land on Apache's books was $1,840,000. Terms of the sale required a down payment of $230,000 and 18 annual payments of $230,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2022 How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at...
On July 1, 2018. Apache Company, a real estate developer, sold a parcel of land to...
On July 1, 2018. Apache Company, a real estate developer, sold a parcel of land to a construction company for $3,000,000. The book value of the land on Apache's books was $1,320,000. Terms of the sale required a down payment of $220.000 and 13 annual payments of $220.000 plus interest at an appropriate interest rate due on each July 1 beginning in 2019 How much revenue wil Apache recognize for the sale ignoring interest), assuming that it recognizes revenue at...
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On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,200,000. The book value of the land on Apache's books was $1,800,000. Terms of the sale required a down payment of $300,000 and 13 annual payments of $300,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2022. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at...
On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,370,000. The book value of the land on Apache's books was $1,840,000. Terms of the sale required a down payment of $230,000 and 18 annual payments of $230,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2022 How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at...
On July 1, 2018. Apache Company, a real estate developer, sold a parcel of land to a construction company for $3,000,000. The book value of the land on Apache's books was $1,320,000. Terms of the sale required a down payment of $220.000 and 13 annual payments of $220.000 plus interest at an appropriate interest rate due on each July 1 beginning in 2019 How much revenue wil Apache recognize for the sale ignoring interest), assuming that it recognizes revenue at...
Exercise 6-19 (Algo) Long-term contract; revenue recognition over time and at a point in time [LO6-9] Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,750,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2022 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2021 $ 360,000 1,440,000 500,000 445,000 2022 $2,155,000 0 1,770,000 1,825,000...
Brief Exercise 6-35 (Algo) Long-term contract; revenue recognition upon completion (LO6-9] A construction company entered into a fixed-price contract to build an office building for $48 million. Construction costs incurred during the first year were $18 million and estimated costs to complete at the end of the year were $27 million. The building was completed during the second year. Construction costs incurred during the second year were $28 million How much revenue and gross profit or loss will the company...
Exercise 6-20 (Algo) Long-term contract; revenue recognition over time vs. upon project completion [LO6-9] On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $390 million. The expected completion date is April 1, 2023, just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated...
Brief Exercise 6-18 (Algo) Time value of money (L06-6) On January 1, 2021, Wooten Technology Associates sold computer equipment to the Denison Company. Delivery was made on January 1, 2021, but payment for the equipment of $9,100 is not due until December 31, 2021. Assuming that Wooten views the time value of money to be a significant component of this transaction and that on 12% Interest rate is applicable. (FV of $1. PV of $1. FVA of $1. PVA of...
Brief Exercise 6-24 (Algo) Timing of revenue recognition; licenses (L06-7] Saar Associates sells two licenses to Kim & Company on September 1, 2021. First, in exchange for $179,000, Saar provides Kim with a copy of its proprietary investment management software, which Saar does not anticipate updating and which Kim can use permanently. Second, in exchange for $153,000, Saar provides Kim with a three-year right to market Kim's financial advisory services under the name of Saar Associates, which Saar advertises on...
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