Assume, instead of $1,440,000, the latest forecast of total costs at the end of 2023 was $1,968,000. How much income would Sheridan then report for the year 2023? Crane Corp. contracted to build a bridge for $4,820,000. Construction began in 2023 and was completed in 2024. Data relating tothe construction are:20232024Costs incurred$1,561,680$1,349,600Estimated costs to complete1,330,320

Step 1: To understand how to measure the extent of completion of a contract, what is meant by the…

Answered: Crane Corp. contracted to build a…

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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Sandhill Construction, which follows ASPE entered into a contract to construct a bridge for a contract price of $2.8 million. Construction began in 2022 and was completed in 2024. Below are the details of the transactions related to the contract: Costs incurred during the year Estimated costs to complete Revenue Expenses $ Gross Profit $ 2022 2022 $637,000 1,489,000 $844,000 Calculate the gross profit to be recognized each year using the completed-contract method. 2023 $ $ 713,000 2024 $715,900 2023 0 $ $ 2024 SUPPORT
Dalton Construction Co. contracted to build a bridge for $10,000,000. Construction began in 2021 and was completed in 2022. Data relating to the construction are: Costs incurred during the year Estimated costs to complete Dalton uses the percentage-of-completion method. 2021 $3,300,000 2,700,000 2022 $2,750,000 Instructions (a) How much revenue should be reported for 2021? Show your computation. (b) Make the entry to record progress billings of $4,100,000 during 2021. (c) Make the entry to record the revenue and gross profit for 2021. (d) How much gross profit should be reported for 2022? Show your computation.
Sheridan Construction Co. contracted to build a bridge for $9,900,000. Construction began in 2024 and was completed in 2025. Data relating to the construction are: 2024 2025 Costs incurred during the year $3,267,000 $2,723,000 Estimated costs to complete 2,673,000 ― Prepare the entry to record progress billings of $4,280,000 during 2024.
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 $ 3,096,000 5,504,000 2,600,000 2,400,000 2025 Cost incurred during the year Estimated costs to complete as of year-end $ 3,870,000 1,634,000 4,366,000 Billings during the year 3,034,000 Cash collections during the year 4,200,000 3,400,000 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. 2026 $ 1,797,400 0
Blossom Construction, which follows ASPE entered into a contract to construct a bridge for a contract price of $2.3 million. Construction began in 2022 and was completed in 2024. Below are the details of the transactions related to the contract: Costs incurred during the year Estimated costs to complete Revenue Expenses Gross Profit Calculate the gross profit to be recognized each year using the completed-contract method. $ 2022 $661,000 $822,000 1,519,000 705,000 2023 2022 2024 $685,900 0 2023 $ 2024
Using the percentage-of-completion method and the cost-to-cost basis, prepare the journal entry to record progress billings of$1,638,800 during 2023.
How much gross profit should be reported for 2021?
Pharoah Construction entered into a contract to construct a bridge for a contract price of $2.95 million. Construction began in 2019 and was completed in 2021. Below are the details of the transactions related to the contract: 2019 2020 2021 Costs incurred during the year $649,000 $836,000 $693,900 Estimated costs to complete 1,427,800 515,000 0 Calculate the revenue, expenses and gross profit to be recognized each year using the percentage-of-completion method. (Round the percentage completion to 2 decimal places, e.g. 52.75% and other answers to 0 decimal places, e.g. 1,525.) 2019 2020 2021 Revenue $ $ $ Expenses Gross Profit $ $ $
mn.9
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 2025 2026 Cost incurred during the year $ 2,490,000 $ 3,984,000 $ 2,008,600 Estimated costs to complete as of year-end 5,810,000 1,826,000 0 Billings during the year 2,030,000 4,444,000 3,526,000 Cash collections during the year 1,815,000 3,900,000 4,285,000 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.
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 2025 2026 Cost incurred during the year $ 1,584,000 $ 3,240,000 $ 2,613,600 Estimated costs to complete as of year-end 5,616,000 2,376,000 0 Billings during the year 1,200,000 3,624,000 5,176,000 Cash collections during the year 1,000,000 2,800,000 6,200,000 Assume that Westgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time. 1. 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. 2024 2025 2026 Cost incurred during the year $ 2,580,000 $ 3,890,000 $ 3,280,000 Estimated costs to complete as of year-end 5,780,000 3,280,000 0 2. Calculate the amount of revenue and gross…
Dalton Construction Co. contracted to build a bridge for $10,000,000. Construction began in 2021 and was completed in 2022. Data relating to the construction are: 2021 2022 Costs incurred during the year $3,300,000 $2,750,000 Estimated costs to complete 2,700,000 — Dalton uses the percentage-of-completion method. Instructions (a) How much revenue should be reported for 2021? Show your computation. (b) Make the entry to record progress billings of $4,100,000 during 2021. (c) Make the entry to record the revenue and gross profit for 2021. (d) How much gross profit should be reported for 2022? Show your computation.

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Crane Corp. contracted to build a bridge for $4,820,000. Construction began in 2023 and was completed in 2024. Data relating to the construction are: 2023 2024 Costs incurred $1,561,680 $1,349,600 Estimated costs to complete 1,330,320