$2.960.000. The project began in Costs incumed collectons during the year How mu
ID: 2571463 • Letter: #
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$2.960.000. The project began in Costs incumed collectons during the year How much gross profit should be recognined from this peoject in 2018 A $592.000 $212,000 C. so D. $2,960,00 E. None of the above 17, OnSeptember 30, 2018, Ferpnin Imports leased make 15 annual lease payments of $62,000 with the first parsmenk de immedinely Accontig warehouse. Tenns ofthe ane re-Ferpawnn require the interest rate. What amount should Fergnon necond the lease tiability ow on Seeme 30, 0 lease liability wte" reconding tis tye of before the first payment is made? Time value of money tables can be A $513,408 B. $480,804 C. $395.274 D. $593,228 at the hack of the E. None of the above recorded sales of $10,400,000nd 18. During 2018, its first year of operations, Hellis tndustries 36,760,000. The company experienced returns of$700,000. Cost of goods sold totaled 8%Of all sales will be returned. How much will Hollis repen as net sales on s A. $9.568,000 R. $10,400,000 C. $9,700,000 D. $3,640,000 E. None of the above 19. The following information relates to a company's accomts reccivalble: accounts receivable balance a $39,000 (credit balance; credit sales during the year, $1,950,000; accounts receivable written otf during the year, $30,000; cash collections from customers, $2.100,000. Assuming the company the beginning of the year. SS00,000, allowance for unco llectible accounts at the beginning of estimates that future bad debts will equal 1 1% of the year end balance in accounts receivable. calculate bad debt expense for the year A. $35,200 B. $26,200 C $50.000 D. $9,000 E. None of the above.Explanation / Answer
16. The correct answer is Option C i.e. $0. Because as the project does qualify as a qualifying asset hence the profit will be recognised only in the year of completion.
17. Lease liability = Annual lease payment (1 + PVAF(8%, 14 year)
.............................= $62,000 (1 + 8.2442)
.............................= $573,140
Correct answer is Option E i.e. None of the above
18. Net Sales = ($10,400,000 - ($10,400,000 x 8%))
.......................= $9,568,000
Correct answer is Option A i.e. $9,568,000
19. Accoounts Receivable at year end = Opening + Credit Sales - Cash Collection - Written off
..............................................................= $500,000 + $1,950,000 - $2,100,000 - $30,000
..............................................................= $320,000
Bad Debt expense = $320,000 x 11%
...............................= $35,200
Correct answer is Option A i.e. $35,200
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