(TCO A) In selecting an accounting method for a newly-contracted long-term construction project, the principal factor to be considered should be – Online Homework Help

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1. (TCO A) In selecting an accounting method for a newly-contracted long-term construction project, the principal factor to be considered should be
2. (TCO A) Tim Construction Co. began operations in 2014. Construction activity for three different multi-year contracts, each begun in 2014, is shown below. Tim uses the completed contract method.

Contract Contract Price Billings Through 12/31/14 Collections Through 12/31/14 Costs to 12/31/14 Estimated Costs to Complete 1 $5,200,000 $3,500,000 $2,600,000 3,000,000 1,000,000 2 3,600,000 1,500,000 1,000,000 800,000 1,600,000 3 3,300,000 1,900,000 1,800,000 2,250,000 1,200,000 What amount of gross profit should Tim recognize on the Income Statement of 2014 related to Contract 3?

3. (TCO B) In Year 2, Ajax, Inc. reported taxable income of $400,000 and pretax financial statement income of $300,000.  The difference resulted from $60,000 of nondeductible premiums on Ajax’s officers’ life insurance and $40,000 of rental income received in advance.  Rental income is taxable when received.  Ajax’s effective tax rate is 30%.  In its Year 2 income statement, what amount should Ajax report as current tax expense (income taxes payable)?
4. (TCO B) Deferred tax amounts that are related to specific assets or liabilities should be classified as current or noncurrent on the balance sheet based on:
5. (TCO C) Presented below is pension information related to Woods, Inc. for the year 2016.
   Service cost                                                                                $84,000
   Interest on projected benefit obligation                                           $76,000
   Interest on vested benefits                                                            $30,000
   Amortization of prior service cost due to increase in benefits            $14,000
   Gain on plan assets                                                                     $21,000
   The amount of pension expense to be reported for 2016 is
6. (TCO C) Presented below is pension information related to Woods, Inc. for the year 2016.
   Service cost                                                                                $135,000
   Interest on projected benefit obligation                                           $46,000
   Interest on vested benefits                                                            $30,000
   Amortization of prior service cost due to increase in benefits            $14,000
   Loss on plan assets                                                                     $21,000
   The amount of pension expense to be reported for 2016 is
7. (TCO D) Lease methods of accounting include which of the following:
8. (TCO D) Which one of the following is a criterion for designating a lease as a capital lease?
9. (TCO D) Advantage(s) of leasing versus buying equipment is (are)

(TCO A) Tim Construction Co. began operations in 2014. Construction activity for three different multi-year contracts, each begun in 2014, is shown below. Tim uses the percentage-of-completion method. Contract Contract Price Billings Through 12/31/14 Collections Through 12/31/14 Costs to 12/31/14 Estimated Costs to Complete 1 $5,200,000 $3,500,000 $2,600,000 3,000,000 1,000,000 2 3,600,000 1,500,000 1,000,000 800,000 1,600,000 3 3,300,000 1,900,000 1,800,000 2,250,000 1,200,000 What amount of gross profit should Tim recognize on the Income Statement of 2014 related to Contract 2?

10. (TCO D) Lease A does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75% of the estimated economic life of the leased property. Lease B does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the leased property. How should the lessee classify these leases?