Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, toconstruct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to completethe project. The total contract price for construction of the building is $4,720,000. The building was completed on December 31,2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, andaccumulated billings to Axelrod under the contract were as follows:Percentage of completionCosts incurred to dateEstimated costs to completeBillings to Axelrod, to dateReq 1 and 2YearAt 12-31-2024Complete this question by entering your answers in the tabs below.Req 320242025202610%$ 371,0003,339,000732,000Required:1. 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 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 inthe balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs.Total project profit (loss)At 12-31-2025 At 12-31-2026$ 5,102,000$ 3,024,0002,016,0002,410,0004,720,00060%1. 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 according topercentage of completion, compute gross profit or loss to be recognized in each of the three years.Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.Show lessReq 1Gross Profit (Loss) Recognized("Upon Completion")100%0Req 2Gross Profit (Loss) Recognized("Over Time") Req 1 and 2Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown inthe balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs.Balance Sheet (Partial)Current assets:Req 3Current liabilities:20242025

Revenue Recognition means the recording of revenues of an entity in its books. It is an accrual…

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:

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:

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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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

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
Req 1 and 2
Year
At 12-31-2024
Complete this question by entering your answers in the tabs below.
Req 3
2024
2025
2026
10%
$ 371,000
3,339,000
732,000
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
the contract 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 be
recognized 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
the balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs.
Total project profit (loss)
At 12-31-2025 At 12-31-2026
$ 5,102,000
$ 3,024,000
2,016,000
2,410,000
4,720,000
60%
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 recognition over time. 2. Assuming Curtiss recognizes revenue over time according to
percentage of completion, compute gross profit or loss to be recognized in each of the three years.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.
Show less
Req 1
Gross Profit (Loss) Recognized
("Upon Completion")
100%
0
Req 2
Gross Profit (Loss) Recognized
("Over Time")

Req 1 and 2
Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in
the balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs.
Balance Sheet (Partial)
Current assets:
Req 3
Current liabilities:
2024
2025

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