BUS 320 Lecture Notes - Lecture 1: Accounts Payable, Gross Profit, Accounts Receivable

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 320
• Professor: Dennis Chung

Document Summary

Bus320: when you study the next two pages of this file, make sure that you also understand how the financial statements are affected by the long-term contract. In particular, make sure you understand the 4th journal entry that you make every year. This is a very important entry and it is the entry that we use to recognize revenue and expense under the percentage-of-completion method. Don"t forget the 5th journal entry that we make only for 20x3; this is the entry we use to record the completion of the contract. Instructions: complete the worksheet that we started in class for whitemud construction company. Carry out all the necessary calculations and obtain the relevant figures for 20x3 following the same approach and procedures we used for 20x1 and 20x2. Notice that 20x3 is also a year with. Problem when you do the pause and check. Revenue for 20x3 should be ,000 and construction expense should also be ,000.