CPA Study Group

as per GAAP,in long term contact the profit is calculated by following completed contct method and percentage of completion, what are the differnces between mentiond and point in time and overtime methods, i got confused, is it new accounting issue? thank you

what is mas contract?

I was surprised to see that UCC allows the sellers to amend the contract if the prices are unfavorable to them. I always thought that a contract can be amended (to increase the price) if the seller is giving additional consideration to the buyer. I would be interested to know what others think.

It is my understanding that of the 10,000 in beginning WIP ... 60% was completed last period and 40% will be included in this period's cost = 4,000 Now, 50,000 was started and completed this period which would mean we need to minus the 10,000 that was completed last period= 40,000 Now, in ending WIP we have 2,000 that was 40% completed = 800 4000+40000+800= 44,800 ---> That would be the equivalent units under FIFO It appears the equivalent units in the solution is double counting the amount in the beginning WIP ... Could you clarify for me please. Thanks !

Dividend may be considered as ordinary income.

Is 50% is relevant in this case

Since the warranty only covers 12 months, why wasn't that taken into account?

Why ans D is not correct?

Should not the loan of $1mn be reported as current liability - it is due within 12 months and there is no agreement to refinance it.

What should be the taxable income for year one. Shouldn't the bad debt expense for the year one should be deducted from sales revenues (500000-200000=300000) ? Please clarify