B Company is recognizing income from long-term construction contracts. In 2020, B entered into a fixedcontract to construct a fly-over connecting Luzon and Mindanao for P65,000,000. Estimated costs andcontract costs incurred up to 2023 were as follows:YearCost incurredEstimated cost at completionProgress billings15,000,0006,000,00025,000,00019,000,000202015,000,00060,000,00062,000,00066,000,00063,000,00020216,700,000202224,500,00016,800,0002023Using percentage of completion method, compute for the following:1. Realized gross profit in 20212. CIP, net of progress billings as of 20223. Revenue earned in 2023

Year Progress Billings 2020 15000000 2021 6000000 2022 25000000 2023 19000000 Total…

Answered: B Company is recognizing income from…

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

In 2024, 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 2026. Information related to the contract is as follows: 2024 $1,400,000 2025 2026 $3,150,000 $2,695,000 Cost incurred during the year Estimated costs to complete as of year-end 5,600,000 2,450,000 0 Billings during the year 1,000,000 3,550,000 5,450,000 Cash collections during the year 800,000 2,600,000 6,600,000 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.
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 $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Westgate recognizes revenue over time according to percentage of completion. complete the…
On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which The is estimated cost P31,200,000. company recognizes construction to Data on this project for 2022-2024 follow: Est'd Costs revenue over time. Contract Costs Billings 10,500,000 12,500,000 14,440,000 incurred to Complete 20,540,000 13,156,000 2022 5,460,000 9,984,000 2023 2024 15,756,000 The contract contains a penalty clause that penalizes the company a reduction of P70,000 from the contract price for every week of delay. contract was delayed for 8 weeks In 2024, the What is the gross profit for 2024? 1,164,000 1,466,400 1,724,000 1,824,000 А. с. в. D.
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…
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 $ 2,079,000 $ 3,465,000 $ 2,371,600 Estimated costs to complete as of year-end 5,621,000 2,156,000 0 Billings during the year 1,700,000 3,844,000 4,456,000 Cash collections during the year 1,500,000 3,300,000 5,200,000 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…
Swifty Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $598,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $894,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $263,120 $412,620 $607,000 Estimated costs to complete 334,880 185,380 –0– Progress billings to date 272,000 545,000 894,000 Cash collected to date 242,000 495,000 894,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $ Gross profit recognized in 2022 $ (b) Using the completed-contract method, compute the estimated…
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…
Sheridan Construction Company has entered into a contract beginning January 1, 2025, to build a parking complex. It has been estimated that the complex will cost $596,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $902,000. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date Cash collected to date (a) $256,280 339,720 270,000 Gross profit recognized in 2025 Gross profit recognized in 2026 2025 Sok and Media 240,000 Gross profit recognized in 2027 $ GA $ LA 2026 Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter O. Do not leave any fields blank.) 5 $429,120 166,880 555,000 505,000 2027 $606,000 902,000 902.000
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 $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the…
In 2024, KP Building Incorporated began work on a four-year construction project (called Cincy One). The contract price is $460 million. KP recognizes revenue on this contract over time according to percentage of completion. At the end of 2024, the following financial statement information indicates the results to date for Cincy One: INCOME STATEMENT: Gross profit (before-taxes) recognized in 2024 $ 43 million BALANCE SHEET: Accounts receivable from construction billings $ 30 million Construction in progress $ 86 million Less: Billings on construction $ (96 million) Net billings in excess of construction in progress $ 10 million Required: Compute the following, placing your answer in the spaces provided and showing supporting computations below. Note: Round your percentage answer to the nearest whole number. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).
In 2021, Montana Corp. entered into a contract to begin work on a two-year project. Montana recognizes revenue over time according to percentage of completion for this contract, and provides the following information (dollars in millions): Accounts receivable, 12/31/2021 (from construction progress billings) $37.5 $140 Actual construction costs incurred in 2021 Cash collected on project during 2021 $105 Construction in progress, 12/31/2021 $210 Estimated percentage of completion during 2021 Selected Amounts O $70,000,000 What is the amount of gross profit on the project recognized by Montana during 2021? O $60,000,000 $35,000,000 O $105,000,000 50 %
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 $ 2,640,000 $ 2,300,000 $ 2,926,000 Estimated costs to complete as of year-end 6,160,000 2,660,000 0 Billings during the year 2,080,000 2,860,000 5,060,000 Cash collections during the year 1,840,000 2,800,000 5,360,000 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…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS