Question 1

Revenue from sales where the buyer has the right of return can only be recognized after the return period has expired.

Accepted Answer

A) True 
 B)False

Question 2

Brierton Company enters a contract at the beginning of year 1 to build a new federal courthouse for a price of $16 million. Brierton estimates that total cost of the project will be $12 million, and will take four years to complete.
 $$\begin{array} { | l | c | c | } 
\hline & \text { Costs incurred } & \begin{array} { c } 
\text { Payments from federal } \
\text { government }
\end{array} \
\hline \text { Year 1 } & \$ 4 \mathrm { M } & \$ 2 \mathrm { M } \
\hline \text { Year 2 } & \$ 4 \mathrm { M } & \$ 2 \mathrm { M } \
\hline \text { Year 3 } & \$ 2 \mathrm { M } & \$ 6 \mathrm { M } \
\hline \text { Year 4 } & \$ 2 \mathrm { M } & \$ 6 \mathrm { M } \
\hline
\end{array}$$
-If Brierton used percentage-of-completion method to account for this project, what would they have reported as profit in year 2?

Accepted Answer

A)  $ 0 
B)  $ 1.333M 
C)  $ 1.5M 
D)  $ 0.667M 
A)  $ 0 
B)  $ 1.333M 
C)  $ 1.5M 
D)  $ 0.667M

Question 3

Hurik Company reports the following $$\begin{array} { | l | r | r | } 
\hline & 2006 & 2007 \
\hline \text { Sales } & \$ 300,000 & \$ 360,000 \
\hline \text { Cost of goods sold } & \$ 75,000 & \$ 270,000 \
\hline
\end{array}$$ Based upon this information which of the following is most correct:

Accepted Answer

A)  Cost of goods sold is a permanent cost. 
B)  Cost of goods sold is an economic cost. 
C)  Cost of goods sold is a totally variable cost. 
D)  Cost of goods sold is a period expense. 
A)  Cost of goods sold is a permanent cost. 
B)  Cost of goods sold is an economic cost. 
C)  Cost of goods sold is a totally variable cost. 
D)  Cost of goods sold is a period expense.

Revenue from sales where the buyer has the right of return can only be recognized after the return period has expired.

Hurik Company reports the following 2006 2007 Sales \ 300,000 \ 360,000 Cost of goods sold \ 75,000 \ 270,000 Based upon this information which of the following is most correct:

Overview of Financial Statement Analysis

Financial Reporting and Analysis

Analyzing Financing Activities

Analyzing Investing Activities

Analyzing Investing Activities: Intercorporate Investments

Cash Flow Analysis

Return on Invested Capital and Profitability Analysis

Prospective Analysis

Credit Analysis

Equity Analysis and Valuation

Filters

Exam 6: Analyzing Operating Activities

Revenue from sales where the buyer has the right of return can only be recognized after the return period has expired.

Hurik Company reports the following 2006 2007 Sales \ 300,000 \ 360,000 Cost of goods sold \ 75,000 \ 270,000 Based upon this information which of the following is most correct:

Overview of Financial Statement Analysis

Financial Reporting and Analysis

Analyzing Financing Activities

Analyzing Investing Activities

Analyzing Investing Activities: Intercorporate Investments

Cash Flow Analysis

Return on Invested Capital and Profitability Analysis

Prospective Analysis

Credit Analysis

Equity Analysis and Valuation

Filters