Crane, Inc. began work on a $6,499,000 contract in 2025 to construct an office building. Crane uses the cost-recovery method. At December 31, 2025, the balances in certain accounts were Construction in Process $1,757,000, Accounts Receivable $260,000, and Billings on Construction in Process $1,055,000. Indicate how these accounts would be reported in Crane's December 31, 2025, balance sheet. (List assets in order of liquidity) Current Assets I CRANE, INC. Balance Sheet For the Year Ended December 31, 2025

Crane, Inc. began work on a $6,499,000 contract in 2025 to construct an office building. Crane uses the cost-recovery method. At December 31, 2025, the balances in certain accounts were Construction in Process $1,757,000, Accounts Receivable $260,000, and Billings on Construction in Process $1,055,000. Indicate how these accounts would be reported in Crane's December 31, 2025, balance sheet. (List assets in order of liquidity) Current Assets I CRANE, INC. Balance Sheet For the Year Ended December 31, 2025

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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Pharoah Construction Company uses the percentage-of-completion method of accounting. In 2025, Pharoah began work under a contract with a contract price of $1,650,000. Other details follow: Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year (a) Your answer is incorrect. 2025 $1,093,400 446,600 933,400 260,000 2026 $1,510,000 -0- 1,650,000 1,650,000 What portion of the total contract price would be recognized as revenue in 2025? In 2026?
On January 1, 2021, Turnstile Construction Company Inc. contracted to build a medical practice office building for Medicine Points Inc. for a total contract price of $2,000,000. On January 1, Turnstile estimated that it would take three years to complete the building. On December 31, 2023, the building was completed. Following are contract costs incurred, estimated costs to complete the contract, and accumulated billings to Medicine Points Inc. for 2021, 2022, and 2023 At 12/31/21 At 12/31/22 At 12/31/23 Contract costs incurred to date $ 540,000 $1,600,000 Estimated costs to complete the contract 1,500,000 500,000 Billings to Medicine Inc. $2,200,000 -0. 300,000 1,400,000 2,000,000 Required: Assuming this contract meets the requirements for recognizing revenue over time, prepare schedules to compute the profit or loss Turnstile Company would recognize as a result of this contract for the years ended December 31, 2021, 2022, and 2023.
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- Oriole Construction Company began work on a $407,000 construction contract in 2025. During 2025, Oriole incurred costs of $272,000, billed its customer for $217,000, and collected $177,500. At December 31, 2025, the estimated additional costs to complete the project total $157,020. Prepare Oriole's journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the cost-recovery method. (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 O for the amounts. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries. Do not round Intermediate calculations.) No. Account Titles and Explanation (a) (b) eTextbook and Medial List of Accounts Debit Credit
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During 2023, Sunland Company started a construction job with a contract price of $1,792,000. The job was completed in 2025. The following information is available. The contract is non-cancellable. Costs incurred to date Estimated costs to complete Billings to date (non-refundable) Collections to date (a) 2023 2024 $448,000 $924,000 672,000 336,000 1,008,000 907,200 302.400 308,000 0000 2025 $1,198,400 0 1,792,000 1,596,000 Calculate the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) nont ROOF
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In 2018, the Laguna Inc entered into a contract to construct a road for 5th Avenue for $14,000,000. The road was completed in 2018. Information related to the contract is as follows: Laguna uses the percentage-of-completion method of accounting for long-term construction contracts. Required: Calculate the amount of gross profit to be recognized in each of the three years. Prepare all necessary journal entries for each of the years (credit various accounts for construction costs incurred). Prepare a partial balance sheet for 2016 and 2017 showing any items related to the contract.
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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: 2025 Cost incurred during the year. Estimated costs to complete as of year-end Billings during the year 2024 $ 2,059,000 5,041,000 2,190,000 $ 2,627,000 2,414,000 2,496,000 2026 $ 2,655,400 0 5,314,000 Cash collections during the year 1,895,000 2,400,000 5,705,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Revenue Gross profit (loss) 2024 2025 2026
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