Financial reporting 2

Taylor Marina has 300 available slips that rent for $730 per season. Payments must be made in full at the start of the boating season, April 1, 2015. Slips for the next season may be reserved if paid for by December 31, 2014. Under a new policy, if payment is made by December 31, 2014, a 5% discount is allowed. The boating season ends October 31, and the marina has a December 31 year-end. To provide cash flow for major dock repairs, the marina operator is also offering a 18% discount to slip renters who pay for the 2016 season.

For the fiscal year ended December 31, 2014, all 300 slips were rented at full price. 193 slips were reserved and paid for the 2015 boating season, and 61 slips for the 2016 boating season were reserved and paid for.

(a)

Prepare the appropriate journal entries for fiscal 2014.

2.

During 2014, Nilsen Company started a construction job with a contract price of $1,617,000. The job was completed in 2016. The following information is available.     2014   2015   2016 Costs incurred to date   $354,600   $846,560   $1,063,000 Estimated costs to complete   630,400   297,440   –0– Billings to date   307,800   862,300   1,617,000 Collections to date   251,500   817,000   1,354,000

(a) Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2014   $[removed] Gross profit recognized in 2015   $[removed] Gross profit recognized in 2016   $[removed]