ACC/421 Week 3 Textbook Solutions
$20.00
Problem P4-4
The following account balances were included in the trial balance of Twain Corporation at June 30, 2012.
| Sales |
$1,578,500 |
|
Depreciation of office furniture and |
$7,250 |
| Sales discounts |
31,150 |
|
equipment |
|
| Cost of goods sold |
896,770 |
|
Real estate and other local taxes |
7,320 |
| Sales salaries |
56,260 |
|
Bad debt expense�selling |
4,850 |
| Sales commissions |
97,600 |
|
Building expense�prorated to |
9,130 |
| Travel expense�salespersons |
28,930 |
|
administration |
|
| Freight-out |
21,400 |
|
Miscellaneous office expenses |
6,000 |
| Entertainment expense |
14,820 |
|
Sales returns |
62,300 |
| Telephone and Internet expense�sales |
9,030 |
|
Dividends received |
38,000 |
| Depreciation of sales equipment |
4,980 |
|
Bond interest expense |
18,000 |
| Building expense�prorated to sales |
6,200 |
|
Income taxes |
102,000 |
| Miscellaneous selling expenses |
4,715 |
|
Depreciation understatement due to |
17,700 |
| Office supplies used |
3,450 |
|
error�2009 (net of tax) |
|
| Telephone and Internet expense� |
2,820 |
|
Dividends declared on preferred stock |
9,000 |
| administration |
|
|
Dividends declared on common stock |
37,000 |
The Retained Earnings account had a balance of $337,000 at July 1, 2011. There are 80,000 shares of common stock outstanding.
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Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2012.
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Problem P18-2
Shanahan Construction Company has entered into a contract beginning January 1, 2014, to build a parking complex. It has been estimated that the complex will cost $600,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $900,000. The following data pertain to the construction period.
2014 2015 2016
Costs to date $270,000 $450,000 $610,000
Estimated costs to complete 330,000 150,000 -0- Progress billings to date 270,000 550,000 900,000
Cash collected to date 240,000 500,000 900,000
Instructions
(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period.
(b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period.
