FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Chapter 6, Problem 13ME
To determine
Compute the revenue, expense, and income for each year 2019 through 2021.
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Bartov Corporation agreed to build a warehouse for $2,500,000. Expected (and actual) costs for the warehouse follow : 2019, $400,000; 2020, $1,000,000; and 2021, $500,000. The company completed the warehouse in 2021. Compare revenues, expenses, and income for each year 2019 through 2021 assuming that Bartov’s performance obligation for the warehouse is fulfilled over time and that the costs incurred provide a close approximation of the value conveyed to the customer.
Research and development cost for Herald Corporation for the year ended December 31, 2018:
Project A - Expected total revenues P7,000,000, starting in early 2018. Expected total costs will be
P5,000,000. Costs incurred to date, all in 2019, are P2,200,000.
Project B - Expected total revenues P6,000,000. Costs incurred to date are P3,500,000. Expected
total costs are P4,500,000. The commencement of commercial sales is uncertain due to problems in
raising funds to cover the final development costs.
Project C - Expected total revenues, P3,500,000 with P1,000,000 of revenue already earned in 2018.
Total development costs incurred, all in 2018, were P3,800,000.
Research projects. Total costs spend in 2018 were P1,500,000.
What total amount should be charged against income in 2018 related to the research and
development costs?
Bartov Corporation agreed to build a warehouse for $2,500,000. Expected (and actual) costs for the warehouse follow: 2019, $400,000; 2020, $1,000,000; and 2021, $500,000. The company completed the warehouse in 2021. Compute revenues, expenses, and income for each year 2019 through 2021 assuming that Bartov’s performance obligation for the warehouse is fulfilled over time and that the costs incurred provide a close approximation of the value conveyed to the customer.
Round percentages to the nearest whole percent. Use rounded percentages to calculate subsequent answers.
Chapter 6 Solutions
FINANCIAL ACCOUNTING
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