On June 1, 2021, Royal Property Management entered into a
one-year contract to oversee leasing and...
On June 1, 2021, Royal Property Management entered into a
one-year contract to oversee leasing and maintenance for an
apartment building. The contract starts on July 1, 2021. Under the
terms of the contract, Royal will be paid a fixed fee of $60,000
and will receive an additional 10% of the fixed fee at the end of
the contract provided that building occupancy exceeds 80%. Royal
estimates a 25% chance it will exceed the occupancy threshold, and
concludes the revenue...
Ejaaz enters into a contract offering variable consideration.
The contract pays him $2000/month for six months...
Ejaaz enters into a contract offering variable consideration.
The contract pays him $2000/month for six months of continuous
consulting services. In addition, there is a 80% chance the
contract will pay an additional $4800 and a 20% chance the contract
will pay an additional $1200, depending on the outcome of the
consulting contract. Ejaaz concludes that this contract qualifies
for revenue recognition over time.
Assume Ejaaz estimates variable consideration as the most likely
amount. What is the amount of revenue...
On February 1, 2021, Arrow Construction Company entered into a
three-year construction contract to build a...
On February 1, 2021, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,225,000. During 2021, costs of $2,090,000 were incurred, with
estimated costs of $4,090,000 yet to be incurred. Billings of
$2,608,000 were sent, and cash collected was $2,340,000.
In 2022, costs incurred were $2,608,000 with remaining costs
estimated to be $3,735,000. 2022 billings were $2,858,000, and
$2,565,000 cash was collected. The project was completed in 2023
after additional costs of...
On January 1, Revis Consulting entered into a contract to
complete a cost reduction program for...
On January 1, Revis Consulting entered into a contract to
complete a cost reduction program for Green Financial over a
six-month period. Revis will receive $51,200 from Green at the end
of each month. If total cost savings reach a specific target, Revis
will receive an additional $25,600 from Green at the end of the
contract, but if total cost savings fall short, Revis will refund
$25,600 to Green. Revis estimates an 80% chance that cost savings
will reach the...
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018,...
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$4,540,000. Curtiss concludes that the contract does not qualify
for revenue recognition over time. The building was completed on
December 31, 2020. Estimated percentage of completion, accumulated
contract costs incurred,...
On January 1, Revis Consulting entered into a contract to
complete a cost reduction program for...
On January 1, Revis Consulting entered into a contract to
complete a cost reduction program for Green Financial over a
six-month period. Revis will receive $51,200 from Green at the end
of each month. If total cost savings reach a specific target, Revis
will receive an additional $25,600 from Green at the end of the
contract, but if total cost savings fall short, Revis will refund
$25,600 to Green. Revis estimates an 80% chance that cost savings
will reach the...
On February 1, 2021, Arrow Construction Company entered into a
three-year construction contract to build a...
On February 1, 2021, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,210,000. During 2021, costs of $2,070,000 were incurred with
estimated costs of $4,070,000 yet to be incurred. Billings of
$2,570,000 were sent, and cash collected was $2,320,000.
In 2022, costs incurred were $2,570,000 with remaining costs
estimated to be $3,705,000. 2022 billings were $2,820,000 and
$2,545,000 cash was collected. The project was completed in 2023
after additional costs of...
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018,...
Curtiss Construction Company, Inc., entered into a fixed-price
contract with Axelrod Associates on July 1, 2018, to construct a
four-story office building. At that time, Curtiss estimated that it
would take between two and three years to complete the project. The
total contract price for construction of the building is
$4,540,000. Curtiss concludes that the contract does not qualify
for revenue recognition over time. The building was completed on
December 31, 2020. Estimated percentage of completion, accumulated
contract costs incurred,...
1. On November 1, 2021, Taylor signed a one-year contract to
provide handyman services on an...
1. On November 1, 2021, Taylor signed a one-year contract to
provide handyman services on an as-needed basis to King Associates,
with the contract to start immediately. King agreed to pay Taylor
$6,000 for the one-year period. Taylor is confident that King will
pay that amount, but payment is not scheduled to occur until 2022.
Taylor should recognize revenue in 2021 in the amount of
a.$0.
b. $3,000.
c. $6,000.
d. $1,000.
2. Harvey's Wholesale Company sold supplies of $46,000...
On 1 July 2019, Entity A entered into the Contract X with a
customer, Entity B,...
On 1 July 2019, Entity A entered into the Contract X with a
customer, Entity B, to sell Product A for $300 per unit. If Entity
B purchases more than 1,000 units of Product A in a 12-month
period, Contract X specifies that the price will be reduced to $250
per unit. Entity B agreed to settle all outstanding amount of
Contract X in July 2020 when both Entities agreed with the total
units of sales on 30 June 2020....