CHARLES CROWNE CO: Cost Method and Physical progress Method 4/8/2014

Q.1 Q. 1 (a) Q. 1 (b)

Income Statement for 1957 <-% of Completion-> <- PP Method ->
Ex.1 Increment Total IncrementTotal
Sales Value 1143303 0 1143303 0 1143303
Cost of Contract Completed 1026112 0 1026112 0 1026112
Gross Income from Contracts 117191 0 117191 0 117191
Add: Discounts Earned 10832 10832 10832
Total 128023 128023 128023
Less
General and Admn Exps 21909
Officers' Compensation 69140
91049 91049 91049
Net Income before Tax *** 36974 36974 36974
Federal Tax 13893 13893 13893
Net Income 23081 0 23081 0 23081
Change in Net Income 0% 0%
Change in Sales 0% 0%

*** Assumed Same Tax because Income Tax Rules are generally different

Contract Gross Retain. Net Collec. Costs Esti.to Total

Amount Billings Billings to date Comple. Costs
(a) (b) (c) (d) (e) (f) (g) (h)
Fire Station 220 232294 116970 11697 105273 65447 102752 106230 208982
Municip Garage 221 110220 90780 9078 81702 47602 76578 9040 85618
Fire Station 224 121950 12250 1225 11025 392 11487 100250 111737
Total 464464 220000 22000 198000 113441 190817 215520 406337

PERCENTAGE OF TOTAL COST

%age Revenue Cost Unbilled Unearned Unincurr
comp. Recog Recog Margin Revenue Revenue WIP ed Cost

Fire Station 220

Municip Garage 221
Fire Station 224
Total

PHYSICAL PROGRESS METHOD (Based on gross billing)

%age Revenue Cost Unbilled Unearned Unincurr
comp. Recog Recog Margin Revenue Revenue WIP ed Cost

Fire Station 220

Municip Garage 221
Fire Station 224
Total

Q.2 Balance Sheet changes

% cost method % PP Method
Retained earning increased by 0 0
Unearned Revenues 0 0
Unincurred Cost 0 0
CHANGES IN LIABILITY SIDE 0 0
So WIP as on 31/12
WIP shown in B/S
Change in WIP

Unbilled Revenues

Retainage

Billing
Less: Cash received
Less: Retainage
Accounts Receivable
A/R shwon in B/S
Change in A/R
CHANGES IN ASSET SIDE
Q. 3 January 31 # 220

Cumulative Method % cost % PP

Cost upto Dec (Q.1) Total billing
Cost for Jan Billings upto Dec
Total costs Billing in Jan
Balance to complete Contract amount
Total costs % of billing
% completion Total estimated cost
Contract Amount Costs to be recognised
Revenue to be recognised Costs recog. till Dec.
Recognised till Dec (Q.1) costs for Jan
Rev. for Jan Profits
Profit for Jan

Residual Method
Residual costs to be recog.* Resi.billing to recog
Costs in January Billing in Jan
% completion % completion
Residual revenue ** Residual costs
Revenue in Jan Costs for Jan
Profit in Jan Profit in Jan

* 220000-102751, ** 232294-114214