Chicago contractors 2013 journal
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I have some questions related to the intermediate accounting 3 ,
Question 1. 1. (TCO A) Benny Building, Inc. won a bid for a new warehouse building contract.
Below is information from the project accountant.
Total Construction Fixed Price $20,000,000
Construction Start Date June 13, 2012
Construction Complete Date December 16, 2013
As of Dec. 31… 2012 2013
Actual cost incurred $8,750,000 $6,360,000
Estimated remaining costs $6,250,000 $-
Billed to customer $11,000,000 $7,000,000
Received from customer $9,500,000 $6,500,000
Assuming Amazon Building, Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013
$1973,333
$2,852,500
$ 890,000
$4,890,000
Question 2
On the balance sheet, a deferred tax liability can be presented as either current or noncurrent liability. The current amount should be
the net temporary taxable amounts that will result in taxable amounts during the next fiscal year
based on the classification of the related asset or liability on the balance sheet
removed from balance sheet if the amount is related to a non current asset.
the sum of all deferred tax events not expected to reverse in one year.
Question 3 . During 2013, Steele Corporation sold merchandise costing $1,500,000 on an installment basis for $2,000,000. The cash receipts related to these sales during 2013 were $800,000.
What is the amount of recognized gross profit Steele Corporation will report on Dec 31, 2013?
$700,000
$500,000
$300,000
$200,000
Question 4 . In its 2011 income statement, Hicks Co. reported depreciation of $600,000 and interest revenue on municipal bonds of $30,000. Hicks reported depreciation of $660,000 on its 2011 income tax return. The difference in depreciation is the only temporary difference, and it will reverse equally over the next three years. Hicks enacted income tax rates are 35% for 2011, 30% for 2012 and 25% for 2013 and 2014. Assuming Hicks expects to report taxable income in all future years, what amount should be included in the deferred income tax liability in Hicks December 31, 2011 balance sheet"?
$21,000
$18,000
$16,000
$10,000
Question 1. 1. Chicago contractors got $5,400,000 contract to construct a school building for the City of Chicago. Work on this contract began in 2013 and the financial data pertaining to this contract is available here.
Cost incurred till Dec.31, 2013 $1,080,000
Billings made to City $1,000,000
Amount collected from City $ 750,000
The estimated future cost to complete this contract is $3,240,000.
(a) Prepare Chicago contractors 2013 journal entries using percentage of completion method.
(b) Show how the contract accounts will appear in the Balance Sheet of Chicago Contractors on 12/31/2013.
Question 2. 2. Hertz Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the year ended December 31, 2013, its first year of operations:
Pretax financial income $300,000
Nontaxable interest received on municipal securities (15,000)
Estimated warranties not deductible for tax purpose in 2013 30,000
Depreciation in excess of financial statement amount (50 ,000)
Taxable income $265,000
Hertz’s tax rate for Year 2013 and for future years is 40%.
a. In its Year 1 income statement, what amount should Hertz report as income tax expense-current portion?
b. In its December 31, 2013 balance sheet, what amount should Hertz report as deferred income tax liability?
Below is information from the project accountant.
Total Construction Fixed Price $20,000,000
Construction Start Date June 13, 2012
Construction Complete Date December 16, 2013
As of Dec. 31… 2012 2013
Actual cost incurred $8,750,000 $6,360,000
Estimated remaining costs $6,250,000 $-
Billed to customer $11,000,000 $7,000,000
Received from customer $9,500,000 $6,500,000
Assuming Amazon Building, Inc. uses the completed contract method, what amount of gross profit would be recognized in 2013
$1973,333
$2,852,500
$ 890,000
$4,890,000
Question 2
On the balance sheet, a deferred tax liability can be presented as either current or noncurrent liability. The current amount should be
the net temporary taxable amounts that will result in taxable amounts during the next fiscal year
based on the classification of the related asset or liability on the balance sheet
removed from balance sheet if the amount is related to a non current asset.
the sum of all deferred tax events not expected to reverse in one year.
Question 3 . During 2013, Steele Corporation sold merchandise costing $1,500,000 on an installment basis for $2,000,000. The cash receipts related to these sales during 2013 were $800,000.
What is the amount of recognized gross profit Steele Corporation will report on Dec 31, 2013?
$700,000
$500,000
$300,000
$200,000
Question 4 . In its 2011 income statement, Hicks Co. reported depreciation of $600,000 and interest revenue on municipal bonds of $30,000. Hicks reported depreciation of $660,000 on its 2011 income tax return. The difference in depreciation is the only temporary difference, and it will reverse equally over the next three years. Hicks enacted income tax rates are 35% for 2011, 30% for 2012 and 25% for 2013 and 2014. Assuming Hicks expects to report taxable income in all future years, what amount should be included in the deferred income tax liability in Hicks December 31, 2011 balance sheet"?
$21,000
$18,000
$16,000
$10,000
Question 1. 1. Chicago contractors got $5,400,000 contract to construct a school building for the City of Chicago. Work on this contract began in 2013 and the financial data pertaining to this contract is available here.
Cost incurred till Dec.31, 2013 $1,080,000
Billings made to City $1,000,000
Amount collected from City $ 750,000
The estimated future cost to complete this contract is $3,240,000.
(a) Prepare Chicago contractors 2013 journal entries using percentage of completion method.
(b) Show how the contract accounts will appear in the Balance Sheet of Chicago Contractors on 12/31/2013.
Question 2. 2. Hertz Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the year ended December 31, 2013, its first year of operations:
Pretax financial income $300,000
Nontaxable interest received on municipal securities (15,000)
Estimated warranties not deductible for tax purpose in 2013 30,000
Depreciation in excess of financial statement amount (50 ,000)
Taxable income $265,000
Hertz’s tax rate for Year 2013 and for future years is 40%.
a. In its Year 1 income statement, what amount should Hertz report as income tax expense-current portion?
b. In its December 31, 2013 balance sheet, what amount should Hertz report as deferred income tax liability?
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