Brady Construction Company contracted to build an apartment complex for a price of $6,400,000. Construction began in 2024 and was completed in 2026. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars. Situation 2 3 4 5 6 Costs Incurred during Year 2024 2026 $1,320 2,960 2,720 1,280 2,280 3,200 Situation 1 2 3 4 5 6 $ 1,640 1,640 1,640 640 640 640 2025 $ 2,550 1,320 2,550 3,140 3,140 3,140 Estimated Costs to Complete (As of the End of the Year) 2024 2025 2026 $ 3,870 3,870 3,870 2024 4,480 4,480 5,955 Required: Complete the following table. Note: Do not round intermediate calculations. Enter your answers in whole dollars and not in thousands of dollars (i.e., $400 thousand should be entered as $400,000). Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign. $ 1,320 2,960 2,620 945 Revenue Recognized Over Time 2026 2025 2,620 2,960 Gross Profit (Loss) Recognized Revenue Recognized Upon Completion 2024 2026 0 0 0 0 o 2025 0 0 0 0

Brady Construction Company contracted to build an apartment complex for a price of $6,400,000. Construction began in 2024 and was completed in 2026. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars. Situation 2 3 4 5 6 Costs Incurred during Year 2024 2026 $1,320 2,960 2,720 1,280 2,280 3,200 Situation 1 2 3 4 5 6 $ 1,640 1,640 1,640 640 640 640 2025 $ 2,550 1,320 2,550 3,140 3,140 3,140 Estimated Costs to Complete (As of the End of the Year) 2024 2025 2026 $ 3,870 3,870 3,870 2024 4,480 4,480 5,955 Required: Complete the following table. Note: Do not round intermediate calculations. Enter your answers in whole dollars and not in thousands of dollars (i.e., $400 thousand should be entered as $400,000). Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign. $ 1,320 2,960 2,620 945 Revenue Recognized Over Time 2026 2025 2,620 2,960 Gross Profit (Loss) Recognized Revenue Recognized Upon Completion 2024 2026 0 0 0 0 o 2025 0 0 0 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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Venus' Venerable Construction contracts to lay marble in a new museum over a three-year period, and the project is considered to be a single performance obligation. The company's accountants record the following details relating to the project: Contract details: Contract price Year Revenue Expense Income Estimated cost Estimated profit $1,500 $1,200 $300 Spending pattern during construction: Year 1 1 [R1] [E1] [11] Year 2 Year 3 $300 Answer the following question(s) by filling in the blanks. Do not include any symbols besides decimals in your answers (do not input commas). $750 Compute the amount of revenue, expense, and income for each year assuming that its performance obligation is fulfilled over time and that the costs it incurs are reflective of the value conveyed to the customer. 2 [R2] [E2] [12] $150 3 [R3] [E3] [13] Venus' Venerable Construction contracts to lay marble in a new museum over a three-year period, and the project is considered to be a single performance obligation.…
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Brady Construction Company contracted to build an apartment complex for a price of $6,100,000. Construction began in 2024 and was completed in 2026. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars. Situation 1 2 3 4 5 6 Situation 1 2 2|3 3 2024 Costs Incurred during Year 2026 $1,230 2,840 2,480 1,220 2,070 2,900 4 5 6 $ 1,610 1,610 1,610 610 610 610 2025 $ 2,460 1,230 2,460 3,110 3,110 3,110 Required: Complete the following table. Note: Do not round intermediate calculations. Enter your answers in whole dollars and not in thousands of dollars (i.e., $400 thousand should be entered as $400,000). Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign. 2024 Estimated Costs to Complete (As of the End of the Year) 2024 2025 2026 $ 3,690 3,690 3,690 4,270 4,270 5,655 $ 1,230 2,840 2,380 930 Revenue Recognized Over Time 2025…
Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,600,000. In the first year of the contract Tullis incurs $3,000,000 of cost and the engineers determined that the remaining costs to complete the project are $5,000,000. Tullis billed $5,000,000 in year 1 and collected $3,100,000 by the end of the end of the year. How should Tullis report Construction in Progress and Billings on Construction in Progress at the end of year 1 on the balance sheet assuming the use of the completed - contract method? O A. asset of $2,000,000 O B. liability of $1,900,000 O C. asset of $1,900,000 O D. liability of $2,000,000
Brady Construction Company contracted to build an apartment complex for a price of $5,400,000. Construction began in 2024 and was completed in 2026. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars. Situation 1 2 3 Costs Incurred during Year 2024 2026 1,540 1,540 $ 1,540 Situation 1 2 3 4 5 6 540 540 540 2025 $ 2,250 1,020 2,250 3,040 3,040 3,040 $1,020 2,560 1,920 1,080 1,580 2,200 Estimated Costs to Complete (As of the End of the Year) 2024 2025 2026 $ 3,270 $ 1,020 3,270 3,270 3,780 3,780 5,000 2,560 1,820 895 1,820 2,060 Required: Complete the following table. Note: Do not round intermediate calculations. Enter your answers in whole dollars and not in thousands of dollars (i.e.. $400 thousand should be entered as $400,000). Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign. Gross Profit (Loss) Recognized Revenue…
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6. Suppose that Schw Corp incurs costs evenly in the construction of their new wrestling room. It takes 3 years to complete this state of the art facility. Costs incurred beg Jan 1, 2020 and ending Dec 31, 2022 as as follows: 2020 $35,000 2021 $141,000 2022 $56,000 What are the weighted average costs for 2022? Thank you Brenda
Mediocre Inc. has entered into a very profitable fixed price contract for constructing a high-rise building over a period of three years. It incurs the following costs relating to the contract during the first year: • Cost of material = P2.5 million• Site labor cost = P2.0 million• Agreed administrative costs as per contract to be reimbursed by the customer = P1 million.• Depreciation of the plant used for the construction = P0.5 million.• Marketing costs for selling apartments, when they are ready = P1.0 million.• Depreciation of idle plant and equipment =P.5 million Total estimated cost of the project = P18 million The percentage of completion (overtime) of this contract at year-end is: 33 1/3% (= 6.0/18.0)27% (= 4.5/16.5)39% (= 7.0/18.0)
How much revenue is recognized on the contract in 20x3?
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Inexperienced construction company Kevin Corp. signed a risky non-cancellable contract to build a research facility at a fixed contract amount of $2,100,000. The work began in early 2023 and Kevin incurred costs of $945,000. At December 31, 2023, the estimated future costs to complete the project totalled $945,000. During 2024, Kevin ran into trouble with weather conditions and incurred the expected costs of $945,000 and estimated that it would need to spend an additional $310,000 to complete the project. During 2025, Kevin reluctantly completed the project, incurring further costs of $365,000. Prepare the December 31, 2024 year-end journal entry to record any loss from the contract, assuming Kevin uses the completed- contract method. (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 debit entry before credit entry.) Date December 31,…