ACCT 557 Week 1 Quiz

1. (TCO A) Platypus Building Inc. won a bid for a new office building contract. Below is info from the project accountant:

2. (TCO A) Kerry Corp purchased a used bottling machine from Bob's Bottling Inc. on Jan 1, 2012 for $2100000.  Bob accounted for the sale correctly under the installment sales method.  It had a book value of $1575000.  Kerry paid with $300000 cash and a note for $1800000 with an annual interest of 10%.  Kerry agreed to make equal annual payments of $600000.  Kerry Corp made their first payment on Jan 1, 2013 of $780000 which included interest of $180000 to date of payment.

3. (TCO A) Blue Suede Construction Corp used the percentage-of-completion method of revenue recognition. They were contracted to build the new amphitheater for $4500000.  Additional information was provided:      
As of Dec 31….                                              2012                2013
Percentage of completion                               35%                 60%
Estimated total expected costs                    $3,750,000      $3,900,000 
Gross profit recognized (Cumulative)            $225,000         $300,000
Contracted costs incurred during 2013 were…

4. (TCO A) Revenue is NOT recognized at the time of sale when…