F2 Flashcards
What is the balance sheet presentation for installment sales?
Accounts receivable
Less: deferred gross profit
= Balance
Installment sales J/E: record the sale.
DR Installment Sale A/R
CR Inventory
CR Deferred Gorss Profit (contra-receivable)
Installment sale J/E: when cash is collected
DR Cash
CR Installment sales accounts receivable
Installment sale J/E: record profit on collection:
DR Deferred gross profit
CR Realized gross profit on installment sale
Cost recover JE: record the sale
DR Cost recovery receivable
CR Inventory
CR Deferred gross profit
Cost recovery JE: record collection
DR Cash
CR Cost recovery receivable
Cost recovery JE: final collection and excess received over costs
DR Cash
CR Cost recovery receivable
DR Deferred gross profit @ amount calculated as profit
CR Realized gross profit on cost recovery sales @ amount calculated as profit
Installment sales: deferred gross profit formula
Installment receivable x GP %
Installment sales: earned gross profit formula
Cash collections x GP %
Under US GAAP, do you capitalize or expense R&D incurred based on contract for 3rd party?
You expense this R&D.
R&D incurred for something that’s going to be used for internal purposes only: do you expense it or capitalize it?
You capitalize it.
