Assume that Blossom Construction Company has a non-cancellable contract to construct a $5,400,000 bridge at an estimated cost of $4,000,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. (Note that, by the end of 2024, Blossom has revised the estimated total cost from $4,000,000 to $4,027,000.) Assume that progress billings are non-refundable. Assume that the company uses the completed-contract method. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year 2023 2024 $1,000,000 $2,899,440 3,000,000 1,127,560 958,000 909,000 2,479,000 1,819,000 2025 $4,027,000 0 1,963,000 2,672,000 What would the journal entries be for 2025? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.)

Assume that Blossom Construction Company has a non-cancellable contract to construct a $5,400,000 bridge at an estimated cost of $4,000,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. (Note that, by the end of 2024, Blossom has revised the estimated total cost from $4,000,000 to $4,027,000.) Assume that progress billings are non-refundable. Assume that the company uses the completed-contract method. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year 2023 2024 $1,000,000 $2,899,440 3,000,000 1,127,560 958,000 909,000 2,479,000 1,819,000 2025 $4,027,000 0 1,963,000 2,672,000 What would the journal entries be for 2025? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Indiana Company began a construction project in 2024 with a contract price of $162 million to be received when the project is completed in 2026 During 2024 Indiana incurred $35 million of costs and estimates an additional $15 million of costs to complete the project Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed in 2025, Indiana incurred additional costs of $59 milion and estimated an additional $38 million in costs to complete the project indiana Note: Do not round intermediate calculations. Multiple Choice recognized $911 milion gross profe on the project in 2025 recognized $9.00 million gross prefit on the project in 2025 ced $3000 mon gress profe on the project in 2025
5) In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 2022 2023 Costs incurred…
Garnet Corporation enters into a 4-year construction contract worth $100 million with Gold company on January 1, 2022. At the end of 2022, construction costs totaled $20 million and Garnet estimates $60 million of construction costs remain. If Garnet uses the percent of completion method to determine revenues, how much revenue will Garnet recognize in 2022 related to the construction contract?
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 3,344,000 $ 3,960,000 $ 1,645,600 Estimated costs to complete as of year-end 5,456,000 1,496,000 0 Billings during the year 2,800,000 4,504,000 2,696,000 Cash collections during the year 2,600,000 4,400,000 3,000,000 Assume that Westgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time.Required:1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).2-b. In the journal below, complete the necessary journal entries…
Sheridan Construction Co. contracted to build a bridge for $10,500,000. Construction began in 2024 and was completed in 2025. Data relating to the construction are: Costs incurred during the year Estimated costs to complete (a) 2024 $4,095,000 Revenue $ 2,730,000 Sheridan uses the percentage-of-completion method. How much revenue should be reported for 2024? 2025 $2,780,000
6) In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 2022 2023 Costs incurred…
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred).2-c. In the journal below, complete the necessary journal entries for the year 2023…
s
Explain clearly
Assume that Crane Construction Company has a non-cancellable contract to construct a $4,640,000 bridge at an estimated cost of $4,176,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. (Note that, by the end of 2024, Crane has revised the estimated total cost from $4,176,000 to $4,228,200.) Assume that progress billings are non-refundable. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year (a1) Account Titles and Explanation (To record cost of construction) (To record progress billings) (To record collections) (To record revenues) 2023 (To record construction expense) 3,173,760 $1,002,240 $2,959,740 $4,228,200 994,000 2024 834,960 1,268,460 2,483,000 Prepare all journal entries required for Crane to account for this contract for 2023. (Credit account titles are automatically indented when the amount is entered. Do not…
In 2020, Grouper Construction Corp. began construction work under a 3-year contract. The contract price was $1,060,000. Grouper uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2020, are shown below. Balance Sheet Accounts receivable $17,700 Construction in process $68,300 Less: Billings 61,300 Costs and recognized profit in excess of billings 7,000 Income Statement Income (before tax) on the contract recognized in 2020 $16,392 (a) How much cash was collected in 2020 on this contract? Portion of contract billings collected $enter a dollar amount (b) What was the initial estimated total income before tax on this contract? Income before tax on this contract $enter a…
Cullumber, Inc. began work on a $7,164,000 contract in 2020 to construct an office building. During 2020, Cullumber, Inc. incurred costs of $1,960,630, billed its customers for $1,255,000, and collected $920,000. At December 31, 2020, the estimated additional costs to complete the project total $3,338,370.Prepare Cullumber’s 2020 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record costs incurred enter a debit amount enter a credit amount enter an account title to record costs incurred enter a debit amount enter a credit amount (To record costs incurred.) enter an account title to record billings enter a debit amount…