Ayayai Construction, Inc. experienced the following construction activity in 2021, the firstyear of operations.ContractXYNTotalContractPrice$254,000323,000229,000$806,000BillingsThrough12/31/21$161,000i112,000S229,000Ayayai Construction, Inc.Partial Income StatementFor the Year 2021CashCollectionsThrough12/31/21$148,000108,000192,000CostsIncurredThrough12/31/21$174,000100,000158,000$502,000 $448,000$432,000$308,000Each of the above contracts is with a different customer, and any work remaining atDecember 31, 2021 is expected to be completed in 2022.EstimatedAdditionalCosts toComplete$ 56,000252,000Prepare a partial income statement to indicate how the above contract information wouldbe reported. Ayayai uses the completed-contract method.-0-

An income statement is a financial statement that displays how lucrative your company was within a…

Ayayai Construction, Inc. experienced the following construction activity in 2021, the first year of operations. Contract X Y N Total Billings Contract Through Price 12/31/21 $254,000 $161,000 112,000 323,000 229,000 229,000 Ayayai Construction, Inc. Partial Income Statement For the Year 2021 S Cash Collections Through 12/31/21 S $148,000 108,000 192,000 Costs Incurred Through 12/31/21 $174,000 100,000 158,000 Estimated Additional Costs to Complete $ 56,000 $806,000 $502,000 $448,000 $432,000 $308,000 Each of the above contracts is with a different customer, and any work remaining at December 31, 2021 is expected to be completed in 2022. 252,000 Prepare a partial income statement to indicate how the above contract information would be reported. Ayayai uses the completed-contract method. -0-

Ayayai Construction, Inc. experienced the following construction activity in 2021, the first year of operations. Contract X Y N Total Billings Contract Through Price 12/31/21 $254,000 $161,000 112,000 323,000 229,000 229,000 Ayayai Construction, Inc. Partial Income Statement For the Year 2021 S Cash Collections Through 12/31/21 S $148,000 108,000 192,000 Costs Incurred Through 12/31/21 $174,000 100,000 158,000 Estimated Additional Costs to Complete $ 56,000 $806,000 $502,000 $448,000 $432,000 $308,000 Each of the above contracts is with a different customer, and any work remaining at December 31, 2021 is expected to be completed in 2022. 252,000 Prepare a partial income statement to indicate how the above contract information would be reported. Ayayai uses the completed-contract method. -0-

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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On April 12, 2021, Jacob’s Construction contracted to build a 400 Unit Apartment Complex at a contract price of $85 million. The schedule of expected (which equals actual) cash collections and contract direct costs (excluding SG&A) is as follows: Year Cash Collections Cost Incurred 2021 $60 million $ 45 million 2022 20 million 27 million Total $80 million $72 million Calculate the Gross Profit for the Total Contract Calculate the Gross Margin for the Total Contract Calculate the revenue for 2021 Calculate the revenue for 2022 Calculate the gross profit for 2021 Calculate the gross profit for 2022 Calculate the gross margin for 2021 Calculate the gross margin for 2022
Sheffield Construction, Inc. experienced the following construction activity in 2021, the first year of operations. Cash Total Contract Billings Collections Through Through Contract Price 12/31/21 12/31/21 X $265,000 $175,000 $160,000 $192,000 Y 335,000 120,000 120,000 110,000 Z 238,000 238,000 208,000 168,000 $838,000 $533,000 $488,000 $470,000 Each of the above contracts is with a different customer, and any work remaining at December 31, 2021 is expected to be completed in 2022. Costs Estimated Incurred Through Additional Costs to Complete 12/31/21 $ 68,000 257,000 -0- $325,000 Prepare a partial income statement to indicate how the above contract information would be reported. Sheffield uses the completed-contract method. Sheffield Construction, Inc. Partial Income Statement For the Year 2021 Prepare a partial balance sheet to indicate how the above contract information would be reported. Sheffield uses the completed-contract method. (List Current Assets in order of liquidity.)…
Rogers Ltd. has entered into a contract beginning in February 2020 to build two warehouses for ocean Ltd. The contract is a non-cancellable fixed price contract for $9.4 million. The following data pertain to the construction period. 2020 2021 2022 Costs for the year $3,285,000 4,015,000 1,800,000 Estimated costs to complete 4,015,000 1,825,000 -0- Progress billings for the year (non-refundable) 2,960,000 3,440,000 3,000,000 Cash collected for the year 2,605,000 3,490,000 3,305,000 a) Using the percentage-of-completion method, calculate the percent complete for each year of the contract. b) Calculate the amount of the gross profit to be recognized each year of the contract. c) Prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.) d) What is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021? Show how the construction contract would be reported on the SFP…
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During 2025, Ivanhoe Company started a construction job with a contract price of $1,610,000. The job was completed in 2027. The following information is available. Costs incurred to date Estimated costs to complete Billings to date Collections to date 2025 $366,300 623,700 300,000 271,000 2026 $772,100 330,900 909,000 807,000 2027 $1,063,000 -0- 1,610,000 1,424,000
Colorado Inc. constructed a factory during 2020 and 2021 under contract with Pacific Machinery Co. Relevant data are summarized below: Contract price Cost Gross profit Contract billings $3,000,000 2020 1,200,000 2021 600,000 2020 800,000 2021 400,000 2020 1,500,000 2021 1,500,000 Colorado Inc. recognizes revenue over time with respect to this contract. In its December 31, 2020, balance sheet, Colorado would report: ● The contract asset, cost and profit in excess of billings, $500,000. The contract liability, billings in excess of cost, of $300,000. The contract asset, contract amount in excess of billings, of $1,500,000. The contract asset, deferred profit, of $400,000.
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,860,000. The project began in 2021 and was completed in 2022 Data relating to the contract are summarized below: 2021 $ 372,000 $1,899,00e 1,488,eee 524,000 318,eee 2022 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2,336,800 2,542, 000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time occording to percentege of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 ssuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented ot the end of 2021 assuming Nortel recognizes revenue over time according to percentege of completion. 4. Prepare a partial…
On January 1, 2020, Miller Construction Company contracted to build a parking lot for the city of St. Louis for $825,000. The following transactions and estimates relate to this contract. Construction costs incurred during 2020 $440,000 $209,000 $192,500 $440,000 Progress billings Cash collections Estimated costs to complete a. Prepare the 2020 journal entry to record profit or loss assuming revenue is recognized over time. Note: Record any multiple debits in alphabetical order and any multiple credits in alphabetical order. a. Account b. To recognize revenues and expenses Account + # + b. Prepare the 2020 journal entry to record profit or loss assuming revenue is recognized at a point in time. Note: If a journal entry (or a line of the journal entry) isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). To recognize revenues and expenses Debit + + Credit Debit Credit
During 2020, Pearl Company started a construction job with a contract price of $1,610,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $393,900 $760,380 $1,059,000 Estimated costs to complete 616,100 341,620 –0– Billings to date 299,000 905,000 1,610,000 Collections to date 268,000 818,000 1,421,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 $enter a dollar amount Gross profit recognized in 2021 $enter a dollar amount Gross profit recognized in 2022 $enter a dollar amount eTextbook and Media List of Accounts Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not…
A company uses the percentage-of-completion method of accounting. In 2020, the company began work a project, which had a contract price of $22,300. Other details follow: 2020 2021 Costs incurred to date $6,000 $18,000 Estimated costs to complete, as of December 31 14,000 -0- Billings to date 11,460 16,830 Collections to date 9,470 14,650 In the journal entry to record progress billings for 2021, how much should Billings on Construction in Process be debited/credited? (Just enter the amount. DO NOT put a plus or minus sign in front of the amount.)
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During 2020, Skysong Company started a construction job with a contract price of $1,620,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $383,800 $850,200 $1,074,000 Estimated costs to complete 626,200 239,800 –0– Billings to date 300,000 899,000 1,620,000 Collections to date 267,000 816,000 1,429,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 Gross profit recognized in 2021 Gross profit recognized in 2022 Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.) Compute the amount of gross…