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Spacey has been hired to build a new space shuttle for NASA for $2 Billion that will transport humans to Mars. Spacey expects it will take five years to build the shuttle.  They use the percentage of completion method to account for long-term construction projects.  Use the following information about the first 4 years of construction to answer the following questions.                                                                                     Year 1                   Year 2                   Year 3                       Year 4 Cash Cost incurred to date               $200 million        $390 million        $1,100 million   $1,400 million Estimated future costs                        $800 million        $910 million        $1,100 million      $700 million Current year Billings                            $350 million        $300 million         $500 million          $400 million Current year Cash coll                         $270 million        $420 million        $490 million           $405 million What is the income statement impact (current period profit or loss) for Year 3?

I have read my course addendum.

On 1/1/2009 ABC, Inc. purchases a 5-year $1,000,000, 6% bond requiring semiannual interest payments from XYZ, Inc.  Interest payments are scheduled to occur on 6/30 and 12/31 each year.  They classify this investment as “Trading”.  ABC, Inc. pays an amount for the bond that creates an effective yield of 5%. What would be the journal entry for ABC, Inc. on 1/1/2009 to record the purchase?

On 1/1/2006 Red, Inc. purchased 100,000 shares of Blue, Inc (representing a 40% ownership interest) for $10 per share. The book value of Blue Inc. was $1,500,000.  In assessing the purchase, Red, Inc. identified that a building owned by Blue, Inc. had a fair value that was $500,000 greater than its book value.  The building had a remaining useful life of 10 years.  In addition, Red, Inc. also identified a machine that had a fair value that was $100,000 higher than its book value, and a 5 year useful life.  Red, Inc. decides to amortize these excesses using the straight-line method. Red, Inc. earns $5,000,000 of Net Income in 2006, and pays $500,000 in dividends. The price of Red, Inc.’s stock is $25 at the end of 2006.    Blue, Inc. earns $1,000,000 of Net Income in 2006, and pays $750,000 in dividends. The price of Blue, Inc.’s stock is $15 at the end of 2006.  What is the value of the “Equity Investment in Blue, Inc.” on Red Inc.’s 12/31/2006 balance sheet?

On 1/1/2006 Red, Inc. purchased 100,000 shares of Blue, Inc (representing a 40% ownership interest) for $10 per share. The book value of Blue Inc. was $1,500,000.  In assessing the purchase, Red, Inc. identified that a building owned by Blue, Inc. had a fair value that was $500,000 greater than its book value.  The building had a remaining useful life of 10 years.  In addition, Red, Inc. also identified a machine that had a fair value that was $100,000 higher than its book value, and a 5 year useful life.  Red, Inc. decides to amortize these excesses using the straight-line method. Red, Inc. earns $5,000,000 of Net Income in 2006, and pays $500,000 in dividends. The price of Red, Inc.’s stock is $25 at the end of 2006.    Blue, Inc. earns $1,000,000 of Net Income in 2006, and pays $750,000 in dividends. The price of Blue, Inc.’s stock is $15 at the end of 2006. How much total “Equity in Investee Income” did Red, Inc. record in their income statement from the investment in Blue, Inc. in 2006?

ABC, Inc. prepares its financial statements consistent with a 12/31 fiscal period end. On 6/30/2014 ABC, Inc. received $100,000 for a basket of goods and services that were sold to XYZ, Inc. In exchange for the $100,000 ABC, Inc. agreed to deliver and install a state of the art machine on 7/1/2014, they also agreed to conduct an 8-hour training session for the current employees on 7/15/2014, and to conduct a second 8-hour training session on 1/15/2015.  Finally, ABC, Inc. will provide four years of customer support which will begin on 7/1/2014.  If sold separately, ABC, Inc. generally charges the following:                                                                   Amount                   Machine                            $80,000                   Installation                      $12,000                   Training                             $500 per hour                   Customer Support      $25,000 When ABC, Inc. prepares their financial statements on 12/31/2015, how much will the record for Unearned Revenue at the end of 2015?

Which of the following is a component of operating budgets?

ESRD, patient is on hemodialysis:

An unfavorable production-volume variance ________.