Question 1 -
Free Form Builders Inc., a construction company, recognizes revenue from its long-term contracts using the percentage-of-completion method. On March 29, 2017, the company signed a contract to construct a building for $600,000. The company estimated that it would take four years to complete the contract and estimated the cost to the company at $425,000 - the expected costs in each of the four years are as follows:
|
Year
|
Cost
|
|
2017
|
$110,750
|
|
2018
|
$100,500
|
|
2019
|
$184,250
|
|
2020
|
$29,500
|
|
Total
|
$425,000
|
Prior to closing its books for the year ended December 31, 2018, management revised its estimates for the costs in 2019 and 2020. It estimated that it would cost $300,000 in 2019 and $100,000 in 2020 to complete the contract.
Required: Compute the revenue, expense, and profit/loss for each of the four years. Assume that actual costs incurred each year were the same as expected/estimated/revised costs.
Question 2 -
The following information relates to the Investments at fair value through Profit and Loss (FVTPL) of Anders Corp.
|
Security
|
Acquisition Date
|
Acquisition Cost
|
Date Sold
|
Selling Price
|
Market Value Dec. 31
|
|
2016
|
2017
|
2018
|
|
Alpha
|
Apr. 31, 2016
|
$60,000
|
NA
|
NA
|
$68,000
|
$72,000
|
$69,000
|
|
Beta
|
Aug. 24, 2016
|
45,000
|
May 27, 2017
|
62,000
|
48,000
|
NA
|
NA
|
|
Delta
|
Jan. 8, 2017
|
35,000
|
NA
|
NA
|
NA
|
38,000
|
41,000
|
|
Omega
|
Jan. 3, 2018
|
95,000
|
June 30, 2018
|
100,000
|
NA
|
NA
|
NA
|
The Anders Corp. closes its books on December 31 each year.
["NA" means not applicable.]
Required:
a. Prepare journal entries relating to these Investments at fair value through Profit and Loss (FVTPL) for each year. (There are NO brokerage fees.)
b. Show how the information regarding Investments at fair value through Profit and Loss (FVTPL) would be presented on the income statement and balance sheet for each year.
Attachment:- Assignment and Template.rar