中级会计学 intermediate accounting 赖红宁 chapter 17课后答案.docx

中级会计学 intermediate accounting 赖红宁 chapter 17课后答案.docx

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中级会计学intermediateaccounting赖红宁chapter17课后答案

CHAPTER17

INCOMERECOGNITIONANDMEASUREMENTOFNETASSETS

CONTENTANALYSISOFEXERCISESANDPROBLEMS

Number

Content

TimeRange

（minutes）

E17-1

RevenueRecognitionAlternatives.Computationofrevenue,expense,andgrossprofitover3yearperiodforvariousrecognitionalternatives.

10-15

E17-2

Percentage-of-Completion.Comparisonofyearlygrossprofitunderthepercentage-of-completionandcompletedcontractsmethods.

15-20

E17-3

Percentage-of-Completion.Profit/lossdetermination.Financialstatementdisclosure.

10-15

E17-4

Percentage-of-Completion.Profit/lossdetermination.Financialstatementdisclosure.

15-20

E17-5

（AICPAadapted）.Percentage-of-Completion.Incomedetermination.

10-15

E17-6

（AICPAadapted）.Long-TermConstructionContract.Completedcontract,percentage-of-completionmethods.Schedule.

15-20

E17-7

ProportionalPerformance.Preparationofincomestatement.

10-15

E17-8

RevenueRecognitionatCompletionofProduction.Summaryjournalentries,inventoryvaluation.

10-15

E17-9

SalesUndertheInstallmentMethod.Preparationofcondensedincomestatement.

10-15

E17-10

SalesUndertheInstallmentMethod.Preparationofjournalentries.

10-15

E17-11

SalesUndertheInstallmentMethod.Preparationofjournalentriesandpartialincomestatement.

15-20

E17-12

AnalysisofInstallmentSales.Computationofunknownamounts.

10-15

E17-13

AdjustingEntries.Preparationofjournalentriesrelatedtoinstallmentsales.

10-15

Number

Content

TimeRange

（minutes）

E17-14

CostRecovery.Preparationofjournalentries.

10-15

E17-15

DepositMethod.Preparationofjournalentries.

10-15

E17-16

Franchisee.Preparationofjournalentriesrelatedtoinitialfranchisefeeforvarioussituations.

10-15

E17-17

Consignee.Preparationofjournalentries.

10-15

E17-18

Consignor.Preparationofjournalentries.

10-15

P17-1

RevenueRecognitionAlternatives.Indicationofwhenrevenueshouldberecognizedundervarioussituations.

15-20

P17-2

RevenueRecognitionAlternatives.Incomestatementandbalancesheetpreparationundervariousmethods.Determinationofendingretainedearnings.

20-30

P17-3

（AICPAadapted）.Percentage-of-Completion.Totalcontractincomeandamountofcashinfirstyeardeterminedfrombalancesheetandincomestatementaccounts.

10-15

P17-4

Long-TermConstructionContracts.Percentage-of-completion,completed-contract.Journalentriestorecordtransactions.

30-40

P17-5

Long-TermConstructionContracts.Percentage-of-completion,completed-contract.Profit/lossdetermination.Financialstatementpresentation.

45-60

P17-6

Long-TermConstructionContracts.Percentage-of-completion,completedcontract.Journalentriestorecordtransactions.

45-60

P17-7

ProportionalPerformance.Preparationofincomestatements.Theoreticalquestion.

20-30

P17-8

SalesUndertheInstallmentMethod.Preparationofjournalentries.

20-30

P17-9

SalesUndertheInstallmentMethod.Preparationofjournalentries.

20-30

P17-10

（AICPAadapted）.CostRecoveryMethod.Preparationofscheduletorecordsaleofidleplantandcashcollectionsundercostrecoverymethod.

40-50

P17-11

Franchise.Preparationofjournalentries.

15-25

P17-12

RealEstate.Preparationofjournalentriesundervariousassumptions.

20-30

P17-13

Consignments.Preparationofjournalentries.Determinationofbalancesheetamounts.

25-35

Number

Content

TimeRange

（minutes）

P17-14

RevenueRecognitionAlternatives.Schedulesofgrossprofitandcondensedincomestatementsforthreedifferentcompanies.

40-60

P17-15

RevenueRecognitionAlternatives.Schedulesofgrossprofitandcondensedincomestatementsforthreedifferentcompanies.

40-60

ANSWERSTOQUESTIONS

Q17-1Revenueisrecognizedpriortothesaleorafterthesaleinexceptionalcasestoincreasetheusefulnessofthefinancialstatementsbymorerelevantreportingofthenatureofacompany'soperations（i.e.,toincreasethepredictivevalueandrepresentationalfaithfulnessoftheaccountinginformation）.

Q17-2Recognitionistheprocessofformallyrecordingandreportinganiteminthefinancialstatementswhereasrealizationistheprocessofconvertingnoncashresourcesintocashorrightstocash.

Q17-3Inallthreesituations,acompanyincreasesitsnetassetsfromcosttosellingpricewhenitrecognizesrevenue.Whenitrecognizesrevenueatthetimeofsale,itrecordstheaccountreceivableatthesellingpriceandreducesinventoryatcost.Whenacompanyrecognizesrevenueduringproduction,itincreasestheinventoryfromcosttosellingprice.Whenacompanyrecognizesrevenueatthetimeofcashreceipt,whentheproductistransferreditrecordstheaccountreceivableatthesellingpriceandreducesittocostthroughthesubtractionofdeferredgrossprofit.Theincreaseinnetassetstosellingpriceoccursasthecompanyreceivescashandreducesdeferredgrossprofit.

Thecompanyadvancesanddefersexpensesforwhichthereisadirect"associationofcauseandeffect"sothattheyarematchedagainsttherevenue.Itusuallyrecognizesotherexpensesinthenormalmanner.

Q17-4Thefollowingthreefactorsareimportantinthedecisionastowhentorecognizerevenue:

1.Theeconomicsubstanceoftheeventtakesprecedenceoverthelegalform.

2.Thecollectibilityofthereceivablefromthesale.

3.Therisksandbenefitsofownershiphavebeentransferredtothebuyer.

Q17-5Thefiverevenuerecognitionalternativesare:

1.Revenuerecognitionintheperiodofthesale.

2.Revenuerecognitionpriortotheperiodofthesale.

3.Revenuerecognitionatthecompletionofproduction.

4.Revenuerecognitionaftertheperiodofthesale.

5.Revenuerecognitiondelayeduntilafutureeventoccurs.

Q17-6Acompanyrecognizesrevenuepriortotheperiodofsaleinordertoreflecteconomicsubstanceinsteadoflegalformsothateconomicrealityisnotdistorted.Thetwomethodsusedarethepercentage-of-completionmethodandtheproportionalperformancemethod.

Q17-7Themajordifferencebetweenthetwomethodsofaccountingforlong-termconstructioncontractsdealswithrevenue（andgrossprofit）recognition.Underthepercentage-of-completionmethod,revenue（andgrossprofit）isrecognizedoverthelifeofthecontractwhereasthecompleted-contractmethodonlyrecognizesrevenue（andgrossprofit）uponthecompletion,orvirtualcompletion,ofthecontract.

Q17-8Acompanyusesthepercentageofcompletionmethodforlong-termcontractswhenthefollowingconditionsaremet:

1.Reasonablydependableestimatescanbemadeoftheextentofprogresstowardscompletion,contractrevenues,andcontractcosts.

2.Thecontractclearlyspecifiestheenforceablerightsregardinggoodsorservicestobeprovidedandreceivedbytheparties,theconsiderationtobeexchanged,andthemannerandtermsofsettlement.

3.Thebuyercanbeexpectedtosatisfyitsobligationsunderthecontract.

4.Thecontractorcanbeexpectedtoperformitscontractualobligations.

Sincetheseconditionswillbemetbymostcontracts,itisclearthatthepercentageofcompletionmethodisthemostfrequentlyusedaccountingprinciple.

Q17-9Revenuegenerallyisrecognizedwhenrealizationhastakenplaceandtherevenueshavebeenearned.Ifaprojectisviewedasacontinuoussale,therevenueisearnedcontinuouslyovertheentireearningprocess.Cashcollectionisreasonablyassuredbecausepartialpaymentsareusuallymade.Furthermore,itmaybearguedthatthefinancialstatementsaremoreusefulunderthepercentage-of-completionmethodbecausethesuccessoftheprojectisreportedonanongoingbasis,ratherthanjustatcompletion.

Q17-10Inputmeasuresuseaninputtotheproductionactivitytomeasurethepercentageofcompletion.Theyassumethatarelationshipexistsbetweentheinputandtheproductionactivity.Twoexamplesofinputmeasuresarethecost-to-costandtheefforts-expendedmethods.

Outputmeasuresusetheresultsachievedtomeasurethepercentageofcompletion.Outputmeasuresmaytheoreticallybeconsideredpreferabletoinputmeasuressincetheymeasuretheresultsachieved.Examplesofoutputmeasuresareunitsproduced,unitsdelivered,contractmilestones,valueadded,orunitsofworkcompleted.

Q17-11Underboththepercentage-of-completionmethodandthecompleted-contractmethod,acompanyrecognizeslosseswhenincurred.Thatis,ifatanytimethecompanyanticipatesthatitwillrealizealossonthecontract,itrecognizesthelossinthecurrentperiod.

Q17-12AcompanynetsConstructioninProgressandPartialBillingsaccountsagainsteachotherforpresentationonthebalancesheet.IfConstructioninProgressexceedsPartialBillings,itreportsthebalanceasanasset.IfPartialBillingsexceedsConstructioninProgress,itreportsthebalanceasaliability.ConstructionRevenueandConstructionExpenseareincomestatementitemspresentedtodeterminegrossprofit.

Q17-13Undertheproportionalperformancemethod,acompanydefersinitialdirectcostsandallocatesthemovertheperformanceperiodinproportiontotherecognitionofservicerevenues,becausethecompanyexpensesinitialdirectcostswhenitrecognizesrevenue.Thecompanyexpensesdirectcostsasincurred,becausethereisaclosecorrelationbetweenthedirectcostsandtheextentofperformanceachieved.Itexpensesindirectcostsasincurred,becausetheyprovidenodiscerniblefuturebenefits.

Q17-14Acompanyrecognizesrevenueaftertheperiodofsalewhenthecollectibilityofthereceivableishighlyuncertainorthereisnoreliablebasisforestimatingthecollectibility.Thetwomethodsusedaretheinstallmentmethodandthecos