1. Business
2. Accounting
3. 13848

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Problem 3:
The Bryan Construction Company received a contract to build a new dormitory complex. The selling price of $30,000,000 will be paid when the complex is completed. The costs to construct the complex are as follows: {see attachment}.
a. Assuming the contract is with a large state-supported school which is very strong financially, how much revenue should The Bryan Construction Company recognize in 19X9?
b. Assume, instead, that the contract is with a school whose financial status is uncertain, and hence the probability of collection is uncertain, how much revenue should Bryan recognize in 19X9?

Problem 4:
The Denton Company had the following balances at January 1, 20X0:
Accounts Receivable $250,000 Debit
Allowance for Uncollectible Accounts $16,000 Credit

The following activity occurred during 20X0:
1. Cash sales were $800,000
2. In addition, cash sales were made to special customers who were given a 4% trade discount. The normal selling price (before the discount) was $200,000.
3. Credit sales were $2,800,000
4. Collections on credit sales: cash collections were $2,608,000; however, credit customers also took advantage of $42,000 worth of cash discounts offered.
5. Sales returns and allowances on credit sales were $26,000. A full credit was given by The Denton Company.
6. Write-offs of bad debts were $17,100.
7. Bad debt recoveries were $300.
8. The December 31, 20X0 estimation of bad debts is 7% of the ending
accounts receivable balance.

a. Prepare the appropriate journal entry for The Denton Company for each of the transactions noted above.