Exam 17: Advanced Issues in Revenue Recognition

On January 1, 2014, Cambridge Realty sold land for $2,000 that had originally cost $1,600. A 5% down payment was received. Further cash collections were as follows: Required: Compute the amount of realized profit for the year indicated under each method shown below:

Revenue recognition is defined as the accomplishments of operating activities.

The importance the economic substance of an event taking precedence over the legal form refers to revenue being

Specific industry guidance regarding revenue recognition is prevalent in

If revenue is not recognized at the time of sale, which of the following accounts may be affected at the time of sale?

North East Co. began business on January 1, 2014. The company uses the installment method. Additional information follows: Required: Compute the balance of Deferred Gross Profit at December 31, 2015.

For retail land sales, revenue is recognized in full using the accrual method if it is earned and the receivable is realized or realizable.

The installment method should be used if

Under the percentage of completion method of revenue recognition, Partial Billings could be reported on the balance sheet as a

When a long-term service contract requires services to be performed in more than one act, revenue is recognized by the

The cost recovery method

Anticipated losses are recognized immediately under which of the following methods of recognizing revenue?

Exhibit 17-2 The following information relates to a project of the Cumberland Construction Company: The contract price was $1,000,000. Cumberland used the percentage-of-completion method of revenue recognition. -Refer to Exhibit 17-2. What amount of gross profit was recognized in 2016?

The operating-cycle concept is used to justify that the net amounts of Construction in Progress and Partial Billings be included as current assets or current liabilities.

You are conducting a seminar for health spa accountants on how to determine net income for long-term service contracts using the proportional performance method. Required: a.Describe the different ways revenue can be recognized on long-term service contracts using proportional performance. b.Discuss how the different types of long-term service contract costs are recognized as expenses.

Pensacola Building Co. signed a contract to build a road over a period of three years for a price of $600,000. Information relating to the performance of the contract is summarized below: Required:

Corbin Company purchased 150,000 gallons of home heating fuel at a cost of $2.25 per gallon. Corbin delivered 95,000 gallons in 2014. The average delivery price was $3.49, delivery cost amounted to $.25 per gallon. Corbin recognizes revenue at the time of the delivery. Required: 1) Prepare summary journal entries for 2014. 2) What amount is in inventory at the end of 2014?

What conditions must be met in order to recognize revenue under SEC Staff Bulletin 104?

If the consignment-in account has a credit balance, it is reported on the consignee's balance sheet as a(n)

In 2014, Majors Company offered its goods to retailers on a consignment basis. The following information is provided regarding Majors Company's 2014 operations: What is Majors' cost of goods sold for 2014?