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CMPC 131 Finals Quiz 1 Short Term AY 2018 2019 Solution

This document contains information and calculations related to construction contract accounting, including: 1) Revenue and cost calculations for multiple construction projects over several years showing gross profit amounts. 2) A multi-year problem calculating percentage of completion, revenue recognized, costs incurred and estimated costs to complete for a construction project. 3) Amortization schedules and calculations for notes receivable related to franchise agreements. 4) Cost of goods sold, sales, commission and profit calculations for TVs and stereos sold on consignment.

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Alinah Aquino
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357 views4 pages

CMPC 131 Finals Quiz 1 Short Term AY 2018 2019 Solution

This document contains information and calculations related to construction contract accounting, including: 1) Revenue and cost calculations for multiple construction projects over several years showing gross profit amounts. 2) A multi-year problem calculating percentage of completion, revenue recognized, costs incurred and estimated costs to complete for a construction project. 3) Amortization schedules and calculations for notes receivable related to franchise agreements. 4) Cost of goods sold, sales, commission and profit calculations for TVs and stereos sold on consignment.

Uploaded by

Alinah Aquino
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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CMPC 131

Midterm Quiz 1

MULTIPLE CHOICE
10 A
Amount remitted 3,412,500
Marketing Expense 225,000
Delivery of items sold 150,000
Delivery cost paid upon receipt of consignment 37,500
Total 3,825,000
Divide by Rate net of Commission (100%-15%) 85%
Sales 4,500,000

11 A
Sales 4,500,000
Cost of Goods Sold
Cost per Unit 450,000
Multiply by No. of Units 10
Total Cost 4,500,000
Freight In - Paid by Consignor 300,000
Freight In - Delivery cost paid upon receipt of 37,500
Total Inventory Cost 4,837,500
Multiply by Percentage Sold 60% (2,902,500)
Marketing Expense (225,000)
Delivery of items sold (150,000)
Commission (675,000)
Consignor's Profit 547,500

12 D
Initial franchise fee 3,000,000
Continuing franchise fee (24,000,000 x 5%) 1,200,000
Total Revenue 4,200,000

13 C
Down Payment 30,000
PV of Receivables 545,872
Franchisee Fee Revenue 575,872

14 B
Cost Incurred 33% 2,700,000
Est. Cost to Complete 67% 5,400,000
Total Est. Construction Cost 100% 8,100,000

Contract Price 9,000,000


Multiply by Percentage of Completion 33%
Revenue for Last Year 3,000,000
Cost Incurred 2,700,000
Profit Last Year 300,000

15 A
Accumulated costs 61,250 33%
Est. Additional costs 122,500 67%
Total Est. Cosnstruction Cost 183,750 100%

Realized Gross Profit 31,500


Accumulated Cost 61,250
Total CIP 92,750
Divide by Percentage of Completion 0
Contract Price 278,250
Multiply by Billings % 0
Billings 111,300
Less: CIP (92,750)
Contract Liability 18,550

LONG PROBLEMS
PROBLEM 1
2017 2018 2019
Gross Profit 180,000 630,000 (90,000)

Contract Price 9,000,000


Less: Total Gross Profit from Contract (720,000)
Total Cost Incurred 8,280,000
Cost from 2017 (1,620,000)
Cost from 2019 (3,690,000)
Cost in 2018 2,970,000

PROBLEM 2
2012 2013
Contract Price 400,000,000.00 400,000,000.00
Multiply by: Percentage of Completion 35.71% 100.00%
Revenue earned to date 142,857,142.86 400,000,000.00
Cost to date 120,000,000.00 336,000,000.00
Income earned to date 22,857,142.86 64,000,000.00
Less: Income earned from prior year 22,857,142.86
Income earned this year 22,857,142.86 41,142,857.14

Cost incurred 120,000,000 216,000,000


Cost incurred from prior year 120,000,000
Total cost incurred for the project 120,000,000 336,000,000
Estimated cost to complete 216,000,000 -
Total estimated construction cost 336,000,000 336,000,000

Percentage of completion 36% 100%

PROBLEM 3
PV of Note Receivable (800,000 x 3.1699) 2,535,920
Down Payment 1,200,000.00
Initial Franchise Fee 3,735,920.00
Deferred Costs
Market Study 100,000.00
Location Assistance 60,000.00
Employee Training 100,000.00 260,000.00
Gross Profit 3,475,920.00
Interest income (Jan-June) 126,796.00
Interest income (June-July) 99,475.60
Total Income 3,702,191.60

Date Principal Payments Interest Income Amortization Balance


7/1/2019 2,535,920.00
6/30/2020 800,000.00 253,592.00 546,408.00 1,989,512.00
6/30/2021 800,000.00 198,951.20 601,048.80 1,388,463.20
6/30/2022 800,000.00 138,846.32 661,153.68 727,309.52
6/30/2023 800,000.00 72,690.48 727,309.52 -

PROBLEM 4
TV Set Stereo Total
Cost 90,000 82,500 172,500
Freight In 3,000 1,500 4,500
Total GAS 93,000 84,000 177,000
Divide by Number of Units 10 5.00
Cost per Unit 9,300 16,800
Multiply by No. of Units S 7 3.00
Cost of Goods Sold 65,100 50,400 115,500
Sales 84,000 63,000 147,000
Gross Profit 18,900 12,600 31,500
Commission 8,400 6,300 14,700
Freight Out 1,680 1,260 2,940
Profit 8,820 5,040 13,860
Total
720,000

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