Assume that Ivanhoe Construction Company has a non-cancellable contract to construct a $4,600,000 bridge at an estimated cost of$4,140,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to theconstruction period. Assume that progress billings are non-refundable.Costs to date (12/31)Estimated costs to complete (12/31)Progress billings during the yearCash collected during the yearContract priceEstimated total costEstimated gross profitEstimated loss2023$1,035,0003,105,000*$2,980,800+$1,676,700955,000788,0002025$2,980,800 $4,657,5001,676,7002024The revised estimates for the bridge contract are as follows.2,443,0001,801,0002023 Original Estimates 2024 Revised Estimates$4,600,000$4,600,0004,140,0004,657.500*$460,0001,202,0002,011,0000$(57,500) Assume that Ivanhoe Construction Company has a non-cancellable contract to construct a $4,600,000 bridge at an estimated cost of$4,140,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to theconstruction period. Assume that progress billings are non-refundable.Costs to date (12/31)Estimated costs to complete (12/31)Progress billings during the yearCash collected during the yearContract priceEstimated total costEstimated gross profitEstimated loss2023$1,035,0003,105,000*$2,980,800+$1,676,700955,000788,0002025$2,980,800 $4,657,5001,676,7002024The revised estimates for the bridge contract are as follows.2,443,0001,801,0002023 Original Estimates 2024 Revised Estimates$4,600,000$4,600,0004,140,0004,657.500*$460,0001,202,0002,011,0000$(57,500)

Lets understand the basics.In percentage of completion method, revenue is recorded based on the cost…

Assume that Ivanhoe Construction Company has a non-cancellable contract to construct a $4,600,000 bridge at an estimated cost of $4.140,000. 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. 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 2023 $1,035,000 3,105,000 955,000 788,000 2024 $2,980,800 1,676,700 2,443,000 1,801,000 2025 $4,657,500 0 1,202,000 2,011,000

Assume that Ivanhoe Construction Company has a non-cancellable contract to construct a $4,600,000 bridge at an estimated cost of $4.140,000. 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. 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 2023 $1,035,000 3,105,000 955,000 788,000 2024 $2,980,800 1,676,700 2,443,000 1,801,000 2025 $4,657,500 0 1,202,000 2,011,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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