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    Tutor Revenue Recognition

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    Angel Valentine Tirayo
    The document discusses corporations and long-term construction contracts. A corporation is a business entity owned by shareholders whose shares can be traded. For long-term construction contracts, journal entries are made to record: 1) costs incurred, 2) billings to customers, 3) cash collections, 4) revenue recognition over time using the percentage-of-completion or cost recovery methods, and 5) completion of the contract. The percentage-of-completion and cost recovery methods differ in how losses on unprofitable contracts are recorded.

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    Tutor Revenue Recognition

    Uploaded by

    Angel Valentine Tirayo
    103 views20 pages
    The document discusses corporations and long-term construction contracts. A corporation is a business entity owned by shareholders whose shares can be traded. For long-term construction contracts, journal entries are made to record: 1) costs incurred, 2) billings to customers, 3) cash collections, 4) revenue recognition over time using the percentage-of-completion or cost recovery methods, and 5) completion of the contract. The percentage-of-completion and cost recovery methods differ in how losses on unprofitable contracts are recorded.

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    The document discusses corporations and long-term construction contracts. A corporation is a business entity owned by shareholders whose shares can be traded. For long-term construction contracts, journal entries are made to record: 1) costs incurred, 2) billings to customers, 3) cash collections, 4) revenue recognition over time using the percentage-of-completion or cost recovery methods, and 5) completion of the contract. The percentage-of-completion and cost recovery methods differ in how losses on unprofitable contracts are recorded.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    103 views20 pages

    Tutor Revenue Recognition

    Uploaded by

    Angel Valentine Tirayo
    The document discusses corporations and long-term construction contracts. A corporation is a business entity owned by shareholders whose shares can be traded. For long-term construction contracts, journal entries are made to record: 1) costs incurred, 2) billings to customers, 3) cash collections, 4) revenue recognition over time using the percentage-of-completion or cost recovery methods, and 5) completion of the contract. The percentage-of-completion and cost recovery methods differ in how losses on unprofitable contracts are recorded.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 20

    CORPORATION

    Tutor
    What is Corporation

    Kepemilikan
    Saham dimiliki oleh sahamnya dapat
    banyak pemegang diperjualbelikan
    saham

    Issue Shares
    untuk
    mendapatkan
    additional capital
    Cash
    issued for
    Fixed
    issued for Assets

    Shares issued for Pay


    Expense

    2 istilah pada
    penerbitan
    saham
    Par Value/
    Stated Market
    Value Value
    Illustration: Hardhat Construction Company has a contract to
    construct a 4,500,000 bridge at an estimated cost of
    4,000,000. The contract is to start in July 2015, and the bridge
    is to be completed in October 2017. The following data pertain to
    the construction period.
    Journal
    Entries
    1. Jurnal Cost Incurred
    Construction in Process XXX
    AP, Cash, Material XXX

    2. Jurnal Billing to Customer


    Account Receivables XXX
    Billing on Construction in Process XXX

    3. Jurnal Cash Collection


    Cash XXX
    Account Receivables XXX
    Journal
    Entries
    4. Jurnal Revenue Recognition
    Construction in Process XXX
    Construction Expense XXX
    Revenue from Long Term Contract XXX

    5. Jurnal Completion
    Billing on Construction in Process XXX
    Construction in Process XXX
    Cost Recovery Method
    Perbedaan
    ada di
    jurnal ke 4
    dan ke 5
    Long Term Contract Losses

    Loss in
    Current Loss on
    Period on unprofita
    Profitabl ble
    e contract
    Contract

    Percentage-of-completion method only, Under both percentage-of-completion


    the estimated cost increase requires a and cost-recovery methods, the
    current-period adjustment of gross company must recognize in the current
    profit recognized in prior periods period the entire expected contract loss
    Loss in Current Period on
    Profitable Contract
    Untung = CIP
    Debit
    Rugi = CIP
    Kredit
    4. Jurnal Revenue Recognition
    Construction in Process XXX
    Construction Expense XXX
    Revenue from Long Term Contract XXX
    Loss on Unprofitable Contract

    NB : Langsung
    Catat Rugi
    Saat Tahun
    Contract Loss
    Loss on Unprofitable Contract
    (in percent complete)

    $675,000 683,438 = (8,438) cumulative loss


    Loss on Unprofitable Contract
    (in percent complete)
    Loss on Unprofitable Contract
    (in cost recovery)

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