JAWABAN ASISTENSI PERTEMUAN 8 REVENUE RECOGNITION

[FK]

SOLUTION 1

SOLUTION 2

a) Schedule to compute the profit or loss for the ended of

Percentage of Completion Method

Cost Recovery Method

2010 2011 2012

11.340.000$ 11.340.000$ 11.340.000$

3.888.000$ 6.898.500$ 9.855.000$

4.752.000$ 2.956.500$ -$

8.640.000$ 9.855.000$ 9.855.000$

2.700.000$ 1.485.000$ 1.485.000$

45% 70% 100%

Estimated cost to complete

Estimated total cost (b)

Estimated total gross profit

Contract price

Cost incurred to date (a)

% of completion (a/b)

2010 2011 2012

5.103.000$ 2.835.000$ 3.402.000$

3.888.000$ 3.010.500$ 2.956.500$

1.215.000$ (175.500)$ 445.500$

Revenue

Costs of construct

Gross profit (loss)

2010 2011 2012

3.888.000$ 3.010.500$ 4.441.500$

3.888.000$ 3.010.500$ 2.956.500$

-$ -$ 1.485.000$ Gross profit (loss)

Revenue

Costs of construct

ICE (CONSIGNOR) HOTSA (CONSIGNEE)

JAWABAN ASISTENSI PERTEMUAN 8 REVENUE RECOGNITION

[FK]

b) The difference of :

Percentage of completion method: Companies recognize revenues and gross profits each period

besed upon the progress of the construction (the percentage of completion). The company

accumulates construction costs plus gross profit earned to date in an inventory account

(Construction in Process), and it accumulates progress billings in a contra inventory account

(Billings on Construction in Progress).

Cost recovery method: Companies recognize revenues only to the extent of cost incurred that

are expected to be recoverable. Once all costs are recognized, profit is recognized. The company

accumulates construction costs in an inventory account (Construction in Process), and it

accumulates progress billings in a contra inventory account (Billings on Construction in Progress).

c) Journal

Percentage of Completion Method

Cost Recovery Method

Dr. Cr. Dr. Cr. Dr. Cr.

Construction in Process (CIP) 3.888.000$ 3.010.500$ 2.956.500$

Various Account 3.888.000$ 3.010.500$ 2.956.500$

Account Receivables 4.320.000$ 4.725.000$ 2.295.000$

Bill on CIP 4.320.000$ 4.725.000$ 2.295.000$

Cash 2.835.000$ 3.960.000$ 4.545.000$

Account Receivables 2.835.000$ 3.960.000$ 4.545.000$

Construction Expense 3.888.000$ 3.010.500$ 2.956.500$

CIP (gross profit/loss) 1.215.000$ 175.500$ 445.500$

Revenue from LT Contract 5.103.000$ 2.835.000$ 3.402.000$

Bill on CIP 11.340.000$

CIP 11.340.000$

Record Cost of Construct.

Record Progress Billing

Recognize Revenue & Gross Profit

Completion of Contract

Payment Collected

Account2010 2011 2012

Dr. Cr. Dr. Cr. Dr. Cr.

Construction in Process (CIP) 3.888.000$ 3.010.500$ 2.956.500$

Various Account 3.888.000$ 3.010.500$ 2.956.500$

Account Receivables 4.320.000$ 4.725.000$ 2.295.000$

Bill on CIP 4.320.000$ 4.725.000$ 2.295.000$

Cash 2.835.000$ 3.960.000$ 4.545.000$

Account Receivables 2.835.000$ 3.960.000$ 4.545.000$

Construction Expense 3.888.000$ 3.010.500$ 2.956.500$

CIP (gross profit/loss) 1.485.000$

Revenue from LT Contract 3.888.000$ 3.010.500$ 4.441.500$

Bill on CIP 11.340.000$

CIP 11.340.000$

Record Cost of Construct.

Record Progress Billing

Payment Collected

Recognize Revenue & Gross Profit

Completion of Contract

Account2010 2011 2012

JAWABAN ASISTENSI PERTEMUAN 8 REVENUE RECOGNITION

[FK]

d) Partial Statement of Financial Position Dec. 31:

Percentage of Completion Method

Cost Recovery Method

2010 2011 2012

5.103.000$ 3.402.000$

4.320.000$ 2.295.000$

783.000$ -$

1.485.000$ 2.250.000$ -$

4.725.000$

2.835.000$

1.107.000$

Costs in excess of billings

Account Receivables

Current Liabilities

Billings

Less: CIP

Billings in excess of CIP

Current Assets

Inventories

CIP

Less: Billings

2010 2011 2012

4.441.500$

2.295.000$

-$

1.485.000$ 2.250.000$ -$

4.320.000$ 4.725.000$

3.888.000$ 3.010.500$

432.000$ 2.146.500$

Costs in excess of billings

Account Receivables

Current Liabilities

Billings

Less: CIP

Billings in excess of CIP

Current Assets

Inventories

CIP

Less: Billings