Current Attempt in Progress Sunland Construction Company began operations on January 1, 2023. During the year, Sunland entered into a non-cancellable contract with Novak Corp. to construct a manufacturing facility. At that time, Sunland estimated that it would take five years to complete the facility at a total cost of $4,533,000. The total contract price for construction of the facility is $6,019,000. During the year, Sunland incurred $1,143,030 in construction costs related to the project. The estimated cost to complete the contract is $4,299,970. Novak was billed and paid 25% of the contract price. The billings are non-refundable. Prepare schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2023, and the amount to be shown as contract assets or liabilities at December 31, 2023, under each of the following methods. (a) Completed-contract method. Sunland Construction Company Computation of Contract Liability $ $
Current Attempt in Progress Sunland Construction Company began operations on January 1, 2023. During the year, Sunland entered into a non-cancellable contract with Novak Corp. to construct a manufacturing facility. At that time, Sunland estimated that it would take five years to complete the facility at a total cost of $4,533,000. The total contract price for construction of the facility is $6,019,000. During the year, Sunland incurred $1,143,030 in construction costs related to the project. The estimated cost to complete the contract is $4,299,970. Novak was billed and paid 25% of the contract price. The billings are non-refundable. Prepare schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2023, and the amount to be shown as contract assets or liabilities at December 31, 2023, under each of the following methods. (a) Completed-contract method. Sunland Construction Company Computation of Contract Liability $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Current Attempt in Progress
Sunland Construction Company began operations on January 1, 2023. During the year, Sunland entered into a non-cancellable
contract with Novak Corp. to construct a manufacturing facility. At that time, Sunland estimated that it would take five years to
complete the facility at a total cost of $4,533,000. The total contract price for construction of the facility is $6,019,000. During the
year, Sunland incurred $1,143,030 in construction costs related to the project. The estimated cost to complete the contract is
$4,299,970. Novak was billed and paid 25% of the contract price. The billings are non-refundable.
Prepare schedules to calculate the amount of gross profit to be recognized for the year ended December 31, 2023, and the amount to
be shown as contract assets or liabilities at December 31, 2023, under each of the following methods.
(a)
Completed-contract method.
Sunland Construction Company
Computation of Contract Liability
$
$
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