Req 1 and 2Req 3Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown inthe balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.Balance Sheet (Partial)Current assets:Costs less loss in excess of billingsCurrent liabilities:Billings in excess of costs and profit2021< Req 1 and 22022Req 3 > Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-storyoffice building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The totalcontract price for construction of the building is $4,000,000. The building was completed on December 31, 2023. Estimatedpercentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings toAxelrod under the contract were as follows:Percentage of completionCosts incurred to dateEstimated costs to completeBillings to Axelrod, to dateReq 1 and 2Complete this question by entering your answers in the tabs below.Req 3At 12-31-2021 At 12-31-202210%$ 350,0003,150,000720,000$2,500,0001,700,0002,170,000Year202120222023Total project profit (loss)Required:1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that thecontract does not qualify for revenue recognition over time.2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to berecognized in each of the three years.3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in thebalance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.$60%< Req 1 and 2At 12-31-20231. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes thatthe contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time accordingto percentage of completion, compute gross profit or loss to be recognized in each of the three years. (Leave no cells blank -be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.)0 $Req 1Req 2Gross Profit (Loss) Recognized Gross Profit (Loss) Recognized("Upon Completion")("Over Time")$0 $100%$4,250,0004,000,000Req 3 >050,00050,000Show less

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-stor office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,000,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings t Axelrod under the contract were as follows:

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-stor office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,000,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings t Axelrod under the contract were as follows:

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 13E: On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million....

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On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,060,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date Required: At 12-31-2024 10% $ 360,000 3,240,000 721,000 At 12-31-2025 $ 2,562,000 1,708,000 2,190,000 At 12-31-2026 60% 100% $ 4,321,000 0 4,060,000 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for…
Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,480,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2024 At 12-31-2025 $367,000 3,303,000 728,000 $ 2,856,000 1,904,000 2,330,000 Ren 1 and 2 10% Dan 3 60% Answer is not complete. Complete this question by entering your answers in the tabs below. Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three…
Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,720,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: At 12-31-2024 At 12-31-2025 At 12-31-2026 Percentage of completion 10% 60% 100% Costs incurred to date $ 371,000 $ 3,024,000 $ 5,102,000 Estimated costs to complete 3,339,000 2,016,000 0 Billings to Axelrod, to date 732,000 2,410,000 4,720,000 Required: Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not…
Curtiss Construction Company, Incorporated, entered into a fixed price contract with Axelrod Associates on July 1, 2024, to construct a four story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,240,000 The building was completed on December 31, 2026 Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows Percentage of completion Cests incurred to date Estimated costs to complete Billings to Axelrod, to date Required: At 12-11-2024 10% At 12-31-2025 $2,688,000 1,792,000 AT 12-11-2026 60% 100% $ 4,534,000 4,240,000 $363,000 3,267,000 724,000 2,250,000 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue…
Saved Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,720,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date Required: At 12-31-2024 At 12-31-2025 At 12-31-2026 10% 60% 100% $ 371,000 3,339,000 732,000 $ 3,024,000 2,016,000 2,410,000 $ 5,102,000. 0 4,720,000 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify…
Grein's Construction Company, entered into a fixed-price contract with Alexa Co. on July 1, 2024, to construct a four-story office building. At that time, Grein's estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,420,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2024 $366,000 3,294,000 727,000 Year 2024 2025 2026 At 12-31-2025 $ 2,814,000 1,876,000 2,310,000 Gross Profit (Loss) Recognized At 12-31-2026 $4,747,000 0 Assuming Grein's recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. If there is a loss, put the number in…
Curtiss Construction Company, Inc. entered into a fixed-price contract with Stewart Associates on July 1, 2019, to construct a four-story office building. At that time, Curtiss estimated it would take between two and three years to complete the project. The total contract price for construction of the building is $5,000,000. The building was completed on December 31, 2021. Information related to the construction is as follows: At 12/31/19 At 12/31/20 Costs incurred to date Estimated costs to complete Billings to Stewart Required: 1. Prepare entries to record construction costs and billings for each year $350,000 3,150,000 700,000 $2,500,000 1,700,000 At 12/31/21 2,200,000 $4,250,000 0 2,100,000
National Construction agreed to construct a building for Berninger Corp with construction beginning on March 15, 2020. The project's contract price is $5,910,000, and National Construction estimates total construction costs would be $4,088,000. The project is scheduled to finish in 2022. Information relating to the costs and billings for this contract is as follows: 2020 2021 2022 Total costs incurred to date $1,533,000 $2,706,000 $4,655,000 Estimated costs to complete 2,555,000 1,804,000 -0- Customer billings to date 2,310,000 4,088,000 5,710,000 Collections to date 2,110,000 3,610,000 5,610,000 How much gross profit should be recorded for 2020, 2021, and 2022? Assuming National Construction uses the percentage-of-completion method of accounting for long-term contracts?
On July 1, 2020, Oriole Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,880,000. On July 1, Oriole estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022. At12/31/20 At12/31/21 At12/31/22 Contract costs incurred to date $288,800 $1,227,600 $2,078,500 Estimated costs to complete the contract 1,231,200 752,400 –0– Billings to Gumbel 290,000 1,090,000 1,820,000 (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any field blank.…
Oriole Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1650000 each quarter. The total contract price is $18762000 and Oriole estimates total costs of $17900000. Oriole estimates that the building will take 3 years to complete, and commences construction on January 2, 2021.At December 31, 2022, Oriole Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18100000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2022 for Oriole as the difference between the Construction in Process and the Billings on Construction in Process accounts, and is it a debit or a credit? Difference between the accounts Debit/Credit $871500 Credit $4690500 Credit $871500 Debit $375000 Debit
YellowStone Construction is constructing an office building under contract for LimeStone Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1300000 each quarter. The total contract price is $15600000 and YellowStone estimates total costs of $17500000. YellowStone estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2022, YellowStone Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $17750000 due to unanticipated price increases.YellowStone Construction completes the remaining 25% of the building construction on December 31, 2023, as scheduled. At that time the total costs of construction are $18500000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that YellowStone will recognize for the year ended December 31, 2023? Revenue Expenses…