Income Measurement and Profitability Analysis Essay Example

Salary Measurement and Profitability Analysis Essay Section 5 Income Measurement and Profitability Analysis practices Exercise 5â€1 Requirement 1 Alpine West ought to perceive income over the ski season on a foreseen utilization premise, for this situation similarly all through the season. The way that the $450 cost is nonrefundable isn't applicable to the income acknowledgment choice. Income ought to be perceived as it is earned, for this situation as the administrations are given during the ski season. Necessity 2 November 6, 2013 Cash450 Unearned revenue450 To record the money assortment December 31, 2013 Unmerited income ($450 x 1/5)90 Revenue90 To perceive income earned in December (no income earned in November, as season begins on December 1). Necessity 3 $90 is remembered for income in the 2013 pay proclamation. The $360 remaining parity in unmerited income is remembered for the present obligation area of the 2013 monetary record. Exercise 5â€3 Requirement 1 2013 cost recuperation %: $234,000 = 65% (net benefit % = 35%) $360,000 2014 cost recuperation %: $245,000 = 70% (net benefit % = 30%) $350,000 2013 gross benefit: Money assortment from 2013 deals of $150,000 x 35%=$52,500 2014 gross benefit: Cash assortment from 2013 deals of $100,000 x 35%=$ 35,000 +Cash assortment from 2014 deals of $120,000 x 30%= 36,000 Total 2014 gross benefit $71,000 Requirement 2 2013 conceded net benefit balance: 2013 starting gross benefit ($360,000 †234,000)$126,000 Less: Gross benefit perceived in 2013 (52,500) Balance in conceded net benefit account$73,500 2014 conceded net benefit balance: 2013 introductory gross benefit ($360,000 †234,000)$ 126,000 Less: Gross benefit perceived in 2013 (52,500) Net benefit perceived in 2014(35,000) 2014 starting gross benefit ($350,000 †245,000)105,000 Less: Gross benefit perceived in 2014 (36,000) Balance in conceded net benefit account$107,500 Exercise 5â€4 2013 Installment receivables360,000 Inventory234,000 Deferred net profit126,000 To record portion deals 2013 Cash150,000 Installment receivables150,000 To record money assortments from portion deals 2013 Deferred net profit52,500 Realized gross profit52,500 To perceive net benefit from portion deals 2014 Installment receivables350,000 We will compose a custom article test on Income Measurement and Profitability Analysis explicitly for you for just $16.38 $13.9/page Request now We will compose a custom exposition test on Income Measurement and Profitability Analysis explicitly for you FOR ONLY $16.38 $13.9/page Recruit Writer We will compose a custom paper test on Income Measurement and Profitability Analysis explicitly for you FOR ONLY $16.38 $13.9/page Recruit Writer Inventory245,000 Deferred net profit105,000 To record portion deals 2014 Cash220,000 Installment receivables220,000 To record money assortments from portion deals 2014 Deferred net profit71,000 Realized gross profit71,000 To perceive net benefit from portion deals Exercise 5â€5 Requirement 1 YearIncome perceived 2013$180,000 ($300,000 †120,000) 2014-0 2015-0 2016 0 Total$180,000 Requirement 2 Cost recuperation %: $120,000 - = 40% (net benefit % = 60%) $300,000 | |Year |Cash Collected |Cost Recovery(40%) |Gross Profit(60%) | |2013 |$ 75,000 |$ 30,000 |$ 45,000 | |2014 | 75,000 | 30,000 | 45,000 | |2015 | 75,000 | 30,000 | 45,000 | |2016 | 75,000 | 30,000 | 45,000 | Totals |$300,000 |$120,000 |$180,000 | Requirement 3 | |Year |Cash Collected |Cost Recovery |Gross Profit | |2013 |$ 75,000 |$ 75,000 | 0 | |2014 | 75,000 | 45,000 $ 30,000 | |2015 | 75,000 | 0 | 75,000 | |2016 | 75,000 | 0 | 75,000 | Totals |$300,000 |$120,000 |$180,000 | Exercise 5â€11 Requirement 1 20132014 Co ntract price$2,000,000$2,000,000 Actual expenses to date 300,0001,875,000 Estimated expenses to finish 1,200,000 0 Total evaluated costs 1,500,0001,875,000 Gross benefit (assessed in 2013)$ 500,000$ 125,000 Gross benefit acknowledgment: 2013: $ 300,000 = 20% x $500,000 = $100,000 $1,500,000 2014:$125,000 †100,000 = $25,000 Requirement 2 2013$ 0 2014$125,000 Requirement 3 | |Balance Sheet | |At December 31, 2013 | |Current resources: | |Accounts receivable | |$ 130,000 | |Costs and benefit ($400,000*) in overabundance | |of billings ($380,000) | |20,000 | * Costs ($300,000) + benefit ($100,000) Exercise 5â€11 (closed) Requirement 4 | |Balance Sheet | |At December 31, 2013 | |Current resources: | |Accounts receivable | |$ 130,000 | |Current liabilities: | |Billings ($380,000) in abundance of expenses ($300,000) | |$ 80,000 | issues Problem 5â€2 Requirement 1 2013 cost recuperation % : $180,000 = 60% (net benefit % = 40%) $300,000 2014 cost recuperation %: $280,000 = 70% (ne t benefit % = 30%) $400,000 2013 gross benefit: Cash assortment from 2013 deals = $120,000 x 40%= $48,000 2014 gross benefit: Cash assortment from 2013 deals = $100,000 x 40%= $ 40,000 +Cash assortment from 2014 deals = $150,000 x 30%= 45,000 Total 2014 gross benefit $85,000 Requirement 2 013 Installment receivables300,000 Inventory180,000 Deferred net profit120,000 To record portion deals Cash120,000 Installment receivables120,000 To record money assortments from portion deals Deferred net profit48,000 Realized gross profit48,000 To perceive net benefit from portion deals Problem 5â€2 (proceeded) 2014 Installment receivables400,000 Inventory280,000 Deferred net profit120,000 To record portion deals Cash250,000 Installment receivables250,000 To record money assortments from portion deals Deferred net profit85,000 Realized gross profit85,000 To perceive net benefit from portion deals Requirement 3 | |Date |Cash Collected |Cost Recovery |Gross Profit | |2013 | |2013 deals |$120,000 |-0 | |2014 | |2013 deals | $100,000 | $ 60,000 |$40,000 | |2014 deals | 150,000 | 150,000 | 0 | 2014 aggregates |$250,000 |$210,000 |$40,000 | Problem 5â€2 (finished up) 2013 Installment receivables300,000 Inventory180,000 Deferred net profit120,000 To record portion deals Cash120,000 Installment receivables120,000 To record money assortment from portion deals 2014 Installment receivables400,000 Inventory280,000 Deferred net profit120,000 To record portion deals Cash250,000 Installment receivables250,000 To record money assortment from portion deals Deferred net profit40,000 Realized gross profit40,000 To perceive net benefit from portion deals Problem 5â€5 Requirement 1 201320142015 Contract price$10,000,000$10,000,000$10,000,000 Actual expenses to date 2,400,000 6,000,000 8,200,000 Estimated expenses to finish 5,600,000 2,000,000 0 Total evaluated costs 8,000,000 8,200,000 Estimated net benefit (deficit) (real in 2015)$ 2,000,000$ 1,800,000 Gross benefit (shortfall) acknowledgment: 2013: $2,400,000 = 30. 0% x $2,000,000 = $600,000 $8,000,000 2014: $6,000,000 = 75. 0% x $2,000,000 = $1,500,000 †600,000 = $900,000 $8,000,000 015:$1,800,000 †1,500,000 = $300,000 Problem 5â€5 (proceeded) Requirement 2 | |2013 |2014 |2015 | |Construction in progress |2,400,000 |3,600,000 |2,200,000 | Various records 2,400,000 |3,600,000 |2,200,000 | |To record development costs | |Accounts receivable |2,000,000 |4,000,000 | Billings on development contract |2,000,000 |4,000,000 | |To rec ord progress billings | |Cash |1,800,000 |3,600,000 |4,600,000 | Accounts receivable |1,800,000 |3,600,000 |4,600,000 | |To record money assortments | |Construction in progress | 600,000 | 900,000 | 300,000 | |(gross benefit) | |Cost of development |2,400,000 |3,600,000 |2,200,000 | |(cost brought about) | Revenue from long haul contracts (1) |3,000,000 |4,500,000 |2,500,000 | |To record net benefit | (1) Revenue perceived: 2013: 30% x $10,000,000 =$3,000,000 2014: 75% x $10,000,000 =$7,500,000 Less: Revenue perceived in 2013(3,000,000) Revenue perceived in 2014$4,500,000 2015: 100% x $10,000,000 =$10,000,000 Less: Revenue perceived in 2013 2014 (7,500,000) Revenue perceived in 2015$2,500,000 Problem 5â€5 (proceeded) Requirement 3 | |Balance Sheet | |2013 | |2014 | |Current resources: | |Accounts receivable | |$ 200,000 | |$600,000 | |Construction in progress |$3,000,000 | |$7,500,000 | Less: Billings |(2,000,000) | |(6,000,000) | |Costs and benefit in abundance | |of billings | |1,000,000 | |1,500,000 | Requirement 4 01320142015 Costs acquired during the year$2,400,000$3,800,000$3,200,000 Estimated expenses to finish as of year-end 5,600,000 3,100,000 201320142015 Contract price$10,000,000$10,000,000$10,000,000 Actual expenses to date 2,400,000 6,200,000 9,400,000 Estimated expenses to finish 5,600,000 3,100,000 0 Total evaluated costs 8,000,000 9,300,000 9,400,000 Estimated net benefit (genuine in 2015)$ 2,000,000$ 700,000$ 600,000 Problem 5â€5 (closed) Gross benefit (deficit) acknowledgment: 2013: $2,400,000 = 30. 0% x $2,000,000 = $600,000 $8,000,000 2014: $6,200,000 = 66. 6667% x $700,000 = $466,667 †600,000 = $(133,333) $9,300,000 015:$600,000 †466,667 = $133,333 Requirement 5 201320142015 Costs acquired during the year$2,400,000$3,800,000$3,900,000 Estimated expenses to finish as of year-end 5,600,000 4,100,000 201320142015 Contract price$10,000,000$10,000,000$10,000,000 Actual expenses to date 2,400,000 6,200,00010,100,000 Estimated exp enses to finish 5,600,000 4,100,000 0 Total assessed costs 8,000,00010,300,00010,100,000 Estimated net benefit (shortfall) (genuine in 2015)$ 2,000,000$ (300,000)$ (100,000) Gross benefit (deficit) acknowledgment: 2013: $2,400,000 = 30. 0% x $2,000,000 = $600,000 $8,000,000 2014: $(300