Cosmo Computer Consultants (CCC) signed a contract in 2022 to develop a computer network system for Platinum Entertainment. Cosmo uses the percentage-of-completion method and determines its measure of progress using the cost-to-cost approach. The firm provided the following information for 2022.Contract PriceActual construction costs incurred during the yearEstimated total costsProgress billings made during the yearCash collections during the year$85,0002022$12,00060,00030,50025,000 Compute the percentage completed, gross profit recognized, and the amount of the revenue recorded in 2022.(Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructionstab you will be marked wrong.)Cumulative percent completeCurrent year revenueGross profit (loss) recognized in the current year

CCC Project Calculations Explained with Examples:Cosmo Computer Consultants (CCC) is using the…

Answered: Cosmo Computer Consultants (CCC) signed…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 35E

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This problem has subparts that still need to be answered Assume Avaya contracted to provide a customer with Internet infrastructure for $2,350,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: 2024 2025 Costs incurred during the year $ 328,000 $ 1,830,000 Estimated costs to complete as of 12/31 1,312,000 0 Billings during the year 436,000 1,690,000 Cash collections during the year 341,000 1,785,000 Required: Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does not qualify for revenue recognition over time. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time…
GinebraCorporation recognizes construction revenue and cost using the percentage of completion method. During 2021, a single long-term project was begun which continued through 2021. Information on the project follows: 2021. 2022 Partial billing on contract 1,000,000. 4,200,000 Accounts receivable 1,000,000 3,000,000 Construction cost 1,050,000 1,920,000 Construction in progress 1,220,000 3,640,000 What is the gross profit recognized from this long-term construction contract in year 2021 and 2022, respectively? 2021 2022 A.220,000. 2,280,000 B.170,000. 500,000 C.220,000. 1,000,000 D.170,000. 1,280,000
Recording Long-Term Construction: Recognize Revenue at a Point in Time and Over Time Watson Construction Company contracted to build a plant for $500,000. Construction started in January 2020 and was completed in November 2021. Watson uses the cost-to-cost method to measure the completion of its performance obligations. Data relating to the contract follow. 2020 2021 Costs incurred during year $290,000 $120,000 Estimated additional costs to complete 125,000 0 Billings during year 270,000 230,000 Cash collections during year 250,000 250,000 Revenue Recognized at a Point in Time Revenue Recognized Over Time a. Provide the 2020 and 2021 journal entries for Watson assuming revenue is recognized at a point in time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, and (4) revenues and expenses. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr.…
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below:2018 2019Costs incurred during the year $ 300,000 $ 1,575,000Estimated costs to complete as of 12/31 1,200,000 –0–Billings during the year 380,000 1,620,000Cash collections during the year 250,000 1,750,000Required:1. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortelrecognizes revenue over time according to percentage of completion
On February 1, 2023, Sandhill Contractors agreed to construct a building at a contract price of $3,460,000. The total estimated construction costs would be $1,890,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: Total costs incurred to date Estimated costs to complete Customer billings to date Collections to date 2023 Gross profit/ (loss) 689,850 1,200,150 1,100,000 1,000,000 2023 2024 573050 $1,162,000 $ 2,365,000 913,000 1,890,000 1,750,000 2025 Calculate the gross profit / (loss) that should be recognized for 2023, 2024, and 2025 using the percentage completion method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round percentage complete to 1 decimal place, e.g. 15.2% and final answers to O decimal places, e.g. 5,125.) 2024 -0- 3,460,000 2,950,000 -107450 $ LA 2025 40450
On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of P50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2016 2017 2018 Contract cost incurred during the 19,200,000 15,600,000 8,700,000 year Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000 The entry to record the recognized profit in 2018 includes credit to O CIP 1,380,000 Contract revenue 10,080,000 O CIP 50,400,000 Contract cost 8,700,000
ABC Construction Company began work on a contract in 2022 and completed the contract in 2023. The total contact price was P8,500,000. Information related to the construction project are as follows: 2022 2023 Costs incurred during the year P1,200,000 P6,250,000 Estimated costs to complete 4,800,000 - Progress billings during the year 1,450,000 7,050,000 Collections during the year 800,000 6,000,000 How much is the gross profit to be recognized in 2023?
jay
In 2021, Cupid Construction Co. (CCC) began work on a two-year fixed price contract project. CCC 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 Actual construction costs incurred in 2021 $ 135 Cash collected on project during 2021 $ 105 Construction in progress, 12/31/2021 $ 207 Estimated percentage of completion during 2021 60 % How much cash remains to be collected by CCC on the project?
Fender Construction Company receives a contract to construct a building over a period of 3 years for a price of $700,000. The contract represents a single performance obligation that will be satisfied over time. Information relating to the performance of the contract is summarized as follows: 2019 2020 2021 Construction costs incurred during the year $150,000 $242,000 $168,000 Estimated costs to complete 350,000 168,000 — Billings during the year 120,000 250,000 330,000 Collections during the year 100,000 260,000 340,000 Required: 1. Prepare journal entries for all 3 years. 2. Assume that the contract represents a single performance obligation that will be satisfied at a point in time. Prepare journal entries for all 3 years. Please dont provide image based answers thank you
Fender Construction Company receives a contract to construct a building over a period of 3 years for a price of $700,000. The contract represents a single performance obligation that will be satisfied over time. Information relating to the performance of the contract is summarized as follows: 2019 2020 2021 Construction costs incurred during the year $150,000 $242,000 $168,000 Estimated costs to complete 350,000 168,000 — Billings during the year 120,000 250,000 330,000 Collections during the year 100,000 260,000 340,000 Required: 1. Prepare journal entries for all 3 years. 2. Assume that the contract represents a single performance obligation that will be satisfied at a point in time. Prepare journal entries for all 3 years. 1. Assume the contract represents a single performance obligation that will be satisfied over time. Prepare journal entries on December 31 for all 3 years -to record costs of construction for cash -to record partial…
On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: 2020 2021 2022 Total costs incurred during the year 4,500,000 5,300,000 4,000,000 Estimated costs to complete 7,500,000 4,200,000 1,800,000 Customer billings to date 6,600,000 12,000,000 13,800,000 Collections to date 6,000,000 10,500,000 13,500,000 Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. Using the cost-recovery method,…

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