Exam 9: OL: Revenue Recognition

According to the FASB,revenue is defined as inflows that result from delivering or producing goods or providing services connected to a company's major business operations.

The percentage-of-completion method recognizes gross profit ________.

IFRS does not require persuasive evidence of an arrangement in order for revenue to be recognized.

Under the zero-gross profit approach,revenues are only reported in the last year.

Charleston Yacht Club sells annual passes to its facilities.An annual pass costs $12,000 and is good for year-round use.On January 1,the company sells 10 passes and collects the cash.The entry on March 31 to record revenue is ________.

Revenue recognition deals with the issues of timing and measurement.

Refer to Camey Construction.How much should Camey recognize as Accounts Receivable at the end of Year 1 assuming the use of the percentage-of-completion method?

Refer to Tullis Construction.How much gross profit should Tullis recognize in Year 1 assuming the use of the percentage-of-completion method?

Refer to Thompson Industries.Assume that Thompson Industries uses the installment sales method.The buyer of the land defaulted on the sales agreement after making the down payment and the first installment.At the time of repossession,the land was worth $700,000. Required: Prepare the journal entry to record the repossession.

Refer to Fare Jewelry.How much revenue should Tomko recognize for 2017 on this transaction?

Under the completed-contract method,the firm only reports profit in the final year of the contract.

Gleason Construction enters into a long-term fixed price contract to build an office building for $20,000,000.In the first year of the contract Camey incurs $6,000,000 of cost and the engineers determined that the remaining costs to complete are $10,000,000.How much gross profit or loss should Gleason recognize in Year 1 assuming the use of the completed-contract method?

Refer to LaGrow Developers.Assuming that LaGrow uses the cost-recovery method,in its December 31,2016 balance sheet,the company would report ________.

Refer to Camey Construction.How should Camey report Construction in Progress and Billings on Construction in Progress at the end of year 1 on the balance sheet assuming the use of the percentage-of-completion method?

List the four criteria specified by the Securities and Exchange Commission for determining whether revenue should be reported on the income statement.

Refer to LaGrow Developers.Assuming that LaGrow uses the installment sales method,in its December 31,2017 balance sheet,the company would report ________.

If the percentage-of-completion method is used and an interim loss is incurred on a long-term contract,it is necessary to recognize that loss in full.

List the five conditions specified by IFRS for revenue recognition from the sale of goods.

Refer to Brutus Construction.Calculate gross profit or loss for each year using the completed-contract method.

According to the FASB,when a seller has collected cash,the earnings process is complete.