account homework

Part 2

1. Discuss the revenue principle and the matching principle as per the generally accepted accounting principles (GAAP).
2. Contrast the percentage-of-completion method of revenue recognition versus the completed contract method.
3. Solve this accounting problem for the ABC grocery company relating to revenue and expense recognition as per GAAP: ABC Corporation uses the percentage-of-completion method of accounting. In 2010, ABC entered into a contract for a contract price of $2,000,000.
   

   	2010
   Costs incurred during the year Save your time - order a paper! Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines Order Paper Now	600,000
   Estimated costs to complete as of Dec 31	900,000
   Billings during the year	400,000
   Collections during the year	300,000

   • What portion of the total contract price is recognized as revenue in 2010?
   • What is the profit recognized for 2010?
   • Prepare the journal entries for 2010 under the percentage completion method