The contents of this chapter include all of the following: Apply the completed-contract method for long-term contracts, identify the proper accounting for losses on long-term contracts, describe the installment-sales method of accounting, explain the cost-recovery method of accounting. | Revenue Recognition: Completed Contract Method PART II: Corporate Accounting Concepts and Issues Lecture 21 Apply the completed-contract method for long-term contracts. Identify the proper accounting for losses on long-term contracts. Describe the installment-sales method of accounting. Explain the cost-recovery method of accounting. Learning Objectives Current Environment Guidelines for revenue recognition Departures from sale basis Revenue Recognition at the Point of Sale Revenue Recognition before Delivery Revenue Recognition after Delivery Sales with discounts Sales with right of return Sales with buybacks Bill and hold sales Principal-agent relationships Trade loading and channel stuffing Multiple-deliverable arrangements Installment-sales method Cost-recovery method Deposit method Summary of bases Percentage-of-completion method Completed-contract method Long-term contract losses Disclosures Completion-of-production basis Revenue Recognition Companies recognize revenue and gross | Revenue Recognition: Completed Contract Method PART II: Corporate Accounting Concepts and Issues Lecture 21 Apply the completed-contract method for long-term contracts. Identify the proper accounting for losses on long-term contracts. Describe the installment-sales method of accounting. Explain the cost-recovery method of accounting. Learning Objectives Current Environment Guidelines for revenue recognition Departures from sale basis Revenue Recognition at the Point of Sale Revenue Recognition before Delivery Revenue Recognition after Delivery Sales with discounts Sales with right of return Sales with buybacks Bill and hold sales Principal-agent relationships Trade loading and channel stuffing Multiple-deliverable arrangements Installment-sales method Cost-recovery method Deposit method Summary of bases Percentage-of-completion method Completed-contract method Long-term contract losses Disclosures Completion-of-production basis Revenue Recognition Companies recognize revenue and gross profit only at point of sale—that is, when the contract is completed. Under this method, companies accumulate costs of long-term contracts in process, but they make no interim charges or credits to income statement accounts for revenues, costs, or gross profit. LO 1 Apply the completed-contract method for long-term contracts. Revenue Recognition Before Delivery Completed Contract Method A) Prepare the journal entries for 2010, 2011, and 2012. Casper Construction Co. LO 3 Apply the percentage-of-completion method for long-term contracts. Completed Contract Method Illustration: LO 3 Apply the percentage-of-completion method for long-term contracts. Completed Contract Method Illustration: LO 1 Apply the completed-contract method for long-term contracts. Completed Contract Method Illustration: Illustration: Completed Contract Method LO 1 Apply the completed-contract method for long-term contracts. Completed Contract and Percentage-of-Completion Methods Compared At the beginning of 2011, .
