Student Name: Class: Problem 05-02 Requirement 1: 2011 Cost recovery %:

= 2012 Cost recovery %:

Gross profit % =

= 2011 Gross Profit: Cash collection from 2011 sales 2012 Gross Profit: Cash collection from 2011 sales Cash collection from 2012 sales Total 2012 gross profit = = X X = X

Gross profit % =

= =

Requirement 2: Date Account 2011 To record installment sales Installment receivables Inventory Deferred gross profit 2011 To record cash collections from installment sales Cash Installment receivables 2011 To recognize gross profit from installment sales Deferred gross profit Realized gross profit 2012 To record installment sales Installment receivables Inventory Deferred gross profit 2012 To record cash collections from installment sales Cash Installment receivables 2012 To recognize gross profit from installment sales Deferred gross profit Realized gross profit Debit Credit

Requirement 3: Date 2011 2011 sales 2012 2011 sales 2012 sales 2012 totals Cash Collected Cost Recovery Gross Profit

Date Account 2011 To record installment sales Installment receivables Inventory Deferred gross profit 2011 To record cash collections from installment sales Cash Installment receivables 2012 To record installment sales Installment receivables Inventory Deferred gross profit 2012 To record cash collections from installment sales Cash Installment receivables 2012 To recognize gross profit from installment sales Deferred gross profit Realized gross profit

Debit

Credit

Given Data P05-02: AJAX COMPANY Installment Sales Sales Cost of sales Customer collections on: 2011 sales 2012 sales 2011 300,000 180,000 120,000
2012 400,000 280,000 100,000 150,000

Student Name: Class: Problem 05-03 Requirement 1: SILVA COMPANY Gross Profit Recognized Total profit Installment sales method: Gross profit % 8/31/2011 Cash collections Point of delivery method Installment sales method Cost recovery method 8/31/2012 8/31/2013 8/31/2014 8/31/2015

Requirement 2: SILVA COMPANY General Journal

Account Installment receivable Sales revenue Cost of goods sold Inventory

To record sale on 8/31/11.

Point of Delivery Debit Credit

Installment Sales Debit Credit

Cost Recovery Debit Credit

Installment receivable Inventory Deferred gross profit

To record sale on 8/31/11.

Cash Installment received

Entry made each Aug. 31.

Deferred gross profit Realized gross profit

Entry made each Aug. 31.

Deferred gross profit Realized gross profit

Entry made 8/31/14 & 8/31/15.

Student Name: Class: Problem 05-03 Requirement 3: SILVA COMPANY Partial Balance Sheet Point of Delivery December 31, 2011 Assets Installment receivable Less deferred gross profit Installment receivables, net December 31, 2012 Assets Installment receivable Less deferred gross profit Installment receivables, net Installment Sales Cost Recovery

Given Data P05-03: SILVA COMPANY Merchandise sold Down payment Annual installments (4) Book value of merchandise $ $ $ $ 500,000 100,000 100,000 300,000

Student Name: Class: Problem 05-05

WESTGATE CONSTRUCTION COMPANY Requirement 1: Gross profit to be recognized Contract price Actual costs to date Estimated costs to complete Total estimated costs Estimated gross profit (loss)

2011

2012

2013

Gross profit (loss) recognition:

2011

2012

2013

Requirement 2: WESTGATE CONSTRUCTION COMPANY General Journal 2011 Account

Construction in progress Various accounts To record construction costs. Accounts receivable Billings on construction contract To record progress billings. Cash Accounts receivable To record cash collections Construction in progress Cost of construction Rev. from long-term contracts To record gross profit.

2012 Credit Debit Credit Debit

2013 Credit

Debit

Requirement 3: WESTGATE CONSTRUCTION COMPANY Partial Balance Sheet 2011 Current assets: Accounts receivable Construction in progress Less: Billings Costs and profit in excess of billings 2012

Student Name: Class: Problem 05-05

Requirement 4: 2011 Costs incurred during year Estimated cost to complete as of year-end 2011 Contract price Actual costs to date Estimated costs to complete Total estimated costs Estimated gross profit (loss) 2012 2013 2012 2013

Gross profit (loss) recognition:

2011

2012

2013

Requirement 5: 2011 Costs incurred during year Estimated cost to complete as of year-end 2011 Contract price Actual costs to date Estimated costs to complete Total estimated costs Estimated gross profit (loss) 2012 2013 2012 2013

Gross profit (loss) recognition:

2011

2012

2013

Given Data P5-05: WESTGATE CONSTRUCTION COMPANY Contract information: Contract amount

$10,000,000 2011 $ 2,400,000 5,600,000 2,000,000 1,800,000 2012 $ 3,600,000 2,000,000 4,000,000 3,600,000 2013 $ 2,200,000 4,000,000 4,600,000

Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year

Costs incurred and costs to complete information (Part 4): 2011 $ 2,400,000 5,600,000 2012 $ 3,800,000 3,100,000 2013 $ 3,200,000 -

Costs incurred during the year Estimated costs to complete as of year-end

Costs incurred and costs to complete information (Part 5): 2011 $ 2,400,000 5,600,000 2012 $ 3,800,000 4,100,000 2013 $ 3,900,000 -

Costs incurred during the year Estimated costs to complete as of year-end