13. The cost-recovery method of recognizing profit for accounting purposes is permitted if a. collections in...
13. The cost-recovery method of recognizing profit for accounting purposes is permitted if a. collections in the year of sale do not exceed 30% of the total sales price. b. an unrealized profit account is credited. c. there is no reasonable basis for estimating collectibility. d. the method is consistently used for all sales of similar merchandise.
Homework Answers
Cost recovery method of recognising profit: In this method we have to first recover the cost incurred and this method can be used when there is no basis for estimating collectability.
So , Answer = Option C = there is no reasonable basis for estimating collectibility
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13. The cost-recovery method of recognizing profit for
accounting purposes is permitted if a. collections in...
Nolan Company sells its product on an installment basis, earning a $450 pretax gross profit on...
Nolan Company sells its product on an installment basis, earning a $450 pretax gross profit on each installment sale. For accounting purposes the entire $450 is recognized in the year of sale, but for income tax purposes the installment method of accounting is used. Assume Nolan makes one sale in 2016, another sale in 2017, and a third sale in 2018. In each case, onethird of the gross sales price is collected in the year of sale, onethird in the...
please net price method 13. The following are transactions of the Morrison Company: On November 5,...
please net price method
13. The following are transactions of the Morrison Company: On November 5, sold merchandise on account for $46,000 with terms of 3/15, n/30. a. On November 20, payment was received on $32,000 worth of merchandise sold on November 5. On December 5, further collections were made on $8,000 of merchandise sold on November 5 c. On December 8, merchandise sold for $4,000 on November 5 was returned by the purchaser and credit was granted by Morrison...
chicago corporation, which uses the allowance method Recognizing and Classifying the Cost of Long-Term Assets E2A....
chicago corporation, which uses the allowance method
Recognizing and Classifying the Cost of Long-Term Assets E2A. CONCEPT Fraser Manufacturing purchased land next to its factory to be used as a parking lot. The following expenditures were incurred by the company: purchase price, $300,000; broker's fees, $24,000; title search and other fees, $2,200; demoli- tion of a cottage on the property, $8,000; general grading of property, $4,200; paving parking lots, $40,000; lighting for parking lots, $32,000; and signs for parking lots,...
12. Under the new method of accounting, service revenues are reported on the income statement in...
12. Under the new method of accounting, service revenues are reported on the income statement in the period in which an agreement is made on cash is received the services are performed 13. A sale is made with credit terms that allow the customer to pay in 30 days. Under the accrual method of accounting the account to be credited at the time of the sale is Accounts Receivable Cash Sales 14. When the company receives the money from its...
Please answer the True/False questions to the best of your knowledge. 1) For federal tax purposes,...
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As of January 1, 2017, Skysong Inc. adopted the retail method of accounting for its merchandise...
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method would it choose? P6-29A Accounting for inventory using the perpetual inventory system- FIFO, LIFO, and...
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Exercises Se the perpetual interessed as some ter started 14 Using accounting vocabulary ch che accounting...
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Tamarisk Construction Company uses the percentage-of-completion method of accounting. In 2017, Tamarisk began work under contract...
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21. Cosmos Company on July 15 sells merchandise on account to Cajon Co. for $6,000, terms...
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please net price method
13. The following are transactions of the Morrison Company: On November 5, sold merchandise on account for $46,000 with terms of 3/15, n/30. a. On November 20, payment was received on $32,000 worth of merchandise sold on November 5. On December 5, further collections were made on $8,000 of merchandise sold on November 5 c. On December 8, merchandise sold for $4,000 on November 5 was returned by the purchaser and credit was granted by Morrison...
chicago corporation, which uses the allowance method
Recognizing and Classifying the Cost of Long-Term Assets E2A. CONCEPT Fraser Manufacturing purchased land next to its factory to be used as a parking lot. The following expenditures were incurred by the company: purchase price, $300,000; broker's fees, $24,000; title search and other fees, $2,200; demoli- tion of a cottage on the property, $8,000; general grading of property, $4,200; paving parking lots, $40,000; lighting for parking lots, $32,000; and signs for parking lots,...
12. Under the new method of accounting, service revenues are reported on the income statement in the period in which an agreement is made on cash is received the services are performed 13. A sale is made with credit terms that allow the customer to pay in 30 days. Under the accrual method of accounting the account to be credited at the time of the sale is Accounts Receivable Cash Sales 14. When the company receives the money from its...
method would it choose? P6-29A Accounting for inventory using the perpetual inventory system- FIFO, LIFO, and weighted average, and comparing FIFO, LIFO, and weighted average Steel Mill began August with 50 units of iron inventory that cost $35 each. During August, the company completed the following inventory transactions: 5. Units Unit Cost Unit Sales Price $85 45 Aug. 3 8 Sale Purchase 90 $54 21 Sale 88 30 Purchase 15 58 Requirements 1. Prepare a perpetual inventory record for the...
Exercises Se the perpetual interessed as some ter started 14 Using accounting vocabulary ch che accounting terms with the corresponding definitions a. Treats the oldest inventory purchases as the first units sold, Specific identification 2. Materiality concept Latin, first-out (LIFO) Conservatism Consistency principle Weighted average Disclosure principle First-in, first-out (FIFO) b. Requires that a company report enough information for outsiders to make knowledgeable decisions. c. Identifies exactly which inventory item was sold. Usually used for higher cost inventory. d. Calculates...
21. Cosmos Company on July 15 sells merchandise on account to Cajon Co. for $6,000, terms 2/10, n/30. On July 20 Cajon Co. returns merchandise worth $1,000 to Cosmos Company. On July 24 payment is received from Cajon Co. for the balance due. What is the amount of cash received? a. $4,800 b. $4,900 c. $5,000 d. $6,000 22.Which of the following would require a compound journal entry? a. To record merchandise returned that was previously purchased on account. b....
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