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(a) Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). $ $

(a) Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). $ $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The board of directors of Crane Construction Company is meeting to choose between the cost-recovery method and the percentage- of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Crane's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Crane commenced doing business on January 1, 2024. 2. Construction activities for the year ended December 31, 2024, were as follows: 3. 4. Project A B CD E с D Total Contract Billings Through Price 12/31/24 $502,000 722,000 476,000 201,000 452,000 $2,353,000 $342,000 212,000 477,000 102,000 402,000 $1,535,000 Cash Collections Through 12/31/24 $312,000 212,000 392,000 66,000 402,000 $1,384,000 Contract Costs Incurred Through 12/31/24 $426,000 198,000 Each contract is with a different customer. Any work remaining to be done on the contracts is expected to be completed in 2025. 352,000 125,000 322,000 $1,423,000 Estimated Additional Costs to Complete Contract $103,000 462,000 -0- 99,000 80,500 $744,500
Transcribed Image Text:The board of directors of Crane Construction Company is meeting to choose between the cost-recovery method and the percentage- of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Crane's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Crane commenced doing business on January 1, 2024. 2. Construction activities for the year ended December 31, 2024, were as follows: 3. 4. Project A B CD E с D Total Contract Billings Through Price 12/31/24 $502,000 722,000 476,000 201,000 452,000 $2,353,000 $342,000 212,000 477,000 102,000 402,000 $1,535,000 Cash Collections Through 12/31/24 $312,000 212,000 392,000 66,000 402,000 $1,384,000 Contract Costs Incurred Through 12/31/24 $426,000 198,000 Each contract is with a different customer. Any work remaining to be done on the contracts is expected to be completed in 2025. 352,000 125,000 322,000 $1,423,000 Estimated Additional Costs to Complete Contract $103,000 462,000 -0- 99,000 80,500 $744,500
(a) Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). eTextbook and Media List of Accounts Save for Later LA Attempts: 0 of 3 used Submit Answer
Transcribed Image Text:(a) Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). eTextbook and Media List of Accounts Save for Later LA Attempts: 0 of 3 used Submit Answer
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