Exam 13: Revenue and Expense Recognition: Additional Concepts

Multi-Storey Builders Ltd had a large three-year project with total revenue of $8 000 000 and estimated total costs of $6 500 000.The project was 20 per cent complete at the end of the first year,70 per cent complete at the end of the second year and 100 per cent complete at the end of the third year.Revenues and costs were as estimated. -How much profit was earned during the first year if the percentage of completion method was used?

Revenue from a credit sale should not be recognised until:

Highrise Constructions Ltd had a large three-year project with total revenue of $5 000 000 and estimated total costs of $4 200 000.The project was 25 per cent complete at the end of the first year,55 per cent complete at the end of the second year and 100 per cent complete at the end of the third year.Revenues and costs were as estimated. - How much profit was earned during the second year if the percentage of completion method was used?

On 1 January 2015,Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from A to B.The light rail was to be built over three years,with progress payments of $7 000 000 to be made at the end of each year.Estimated costs were $15 000 000 and the following costs incurred and paid by Romulus Ltd were in accordance with estimates and represented the percentage completed in each year: The project was completed in December 2017. -Using the percentage of completion method,what profit would Romulus Ltd report in 2015?

The profit for a particular project of Blue Fin Ltd,using the percentage of completion method,was $470 000 for year 1 and $690 000 for year 2 (completion). -What difference would there be to profit for year 1 if the completion of production method were used?

The percentage of completion profit for a particular project of Redgate Ltd was $200 000 for year 1 and $220 000 for year 2 (completion). -What difference would there be to the total profit for the two years if the completion of production method were used?

Leslie Ltd has found an error in its revenue account: an invoice for $3000 was recorded as revenue in 2015 when it should have been recorded in 2016.The company's income tax rate is 40 per cent and there was no corresponding error in cost of goods sold. -Assuming that the dividend is unchanged,what is the effect of the error on retained profits at end of 2015?

Revenue should be recognised when:

Toy Company manufactures toy koalas.Transactions for the year 2016 were as follows: What was the reported profit for the year 2016 if revenue was recognised at the point of sale?

Junction Company had the following transactions,among others,during August.Which transaction represented an expense during August?

Leslie Ltd has found an error in its revenue account: an invoice for $3000 was recorded as revenue in 2015 when it should have been recorded in 2016.The company's income tax rate is 40 per cent and there was no corresponding error in cost of goods sold. -What is the effect of the error on the 2015 net profit?

Opec Ltd manufactures crystal balls.Transactions for year ended 31 December 2016 were as follows: What was the reported profit for the year 2016?

On 1 January 2015,Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from A to B.The light rail was to be built over three years,with progress payments of $7 000 000 to be made at the end of each year.Estimated costs were $15 000 000 and the following costs incurred and paid by Romulus Ltd were in accordance with estimates and represented the percentage completed in each year: The project was completed in December 2017. -Using the completed contract method,how much profit would Romulus Ltd report in 2017?

Which of the following is NOT necessary in order to recognise revenue under the percentage of completion method?

On 1 January 2015,Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from A to B.The light rail was to be built over three years,with progress payments of $7 000 000 to be made at the end of each year.Estimated costs were $15 000 000 and the following costs incurred and paid by Romulus Ltd were in accordance with estimates and represented the percentage completed in each year: The project was completed in December 2017. -Using the percentage of completion method,what profit would Romulus Ltd report in 2016?

The profit for a particular project of Blue Fin Ltd,using the percentage of completion method,was $470 000 for year 1 and $690 000 for year 2 (completion). -What difference would there be to the total profit for two years if the completion of production method were used?

Holidays Ltd manufactures caravans.Transactions for the year ended 30 June 2016 were as follows: - What was the reported profit for the year ended 30 June 2016 if revenue was recognised at the point of sale?

Multi-Storey Builders Ltd had a large three-year project with total revenue of $8 000 000 and estimated total costs of $6 500 000.The project was 20 per cent complete at the end of the first year,70 per cent complete at the end of the second year and 100 per cent complete at the end of the third year.Revenues and costs were as estimated. - How much profit was earned during the third year if the percentage of completion method was used?

Revenue recognition means that:

The percentage of completion profit for a particular project of Redgate Ltd was $200 000 for year 1 and $220 000 for year 2 (completion). -What difference would there be in profit for year 2 if the completion of production method were used?