Dalton Construction Co. contracted to build a bridge for $10,000,000. Construction began in2021 and was completed in 2022. Data relating to the construction are:Costs incurred during the yearEstimated costs to completeDalton uses the percentage-of-completion method.2021$3,300,0002,700,0002022$2,750,000Instructions(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.

Percentage of completion method used for construction accounting in which revenue and expenses…

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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hardhat Construction Company has a contract to construct a €4,500,000 bridge at an estimated cost of €4,556,250. The contract is to start in July 2019, and the bridge is to be completed in October 2021. The following data pertain to the construction period. 2019 2020 2021 Cost to date $ 1,000,000 $ 2,916,000 $ 4,556,250 Estimated cost to complete 3,000,000 $ 1,640,250 Progress billing during the year 900,000 2,400,000 1,200,000 Cash collected during the year 750,000 1,750,000 2,000,000 REQUIRED: a) Using percentage-of-completion method, prepare schedules to compute the profit and loss to be recognized as a result of this contract for the year ended October 31, 2019, 2020 and 2021. b) Using cost recovery method, prepare schedules to compute the profit and loss to be recognized as a result of this contract for the year ended October 31, 2019, 2020 and 2021.
Domestic
On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,075,000. During 2021, costs of $2,030,000 were incurred, with estimated costs of $4,030,000 yet to be incurred. Billings of $2,536,000 were sent, and cash collected was $2,280,000. In 2022, costs incurred were $2,536,000 with remaining costs estimated to be $3,645,000. 2022 billings were $2,786,000, and $2,505,000 cash was collected. The project was completed in 2023 after additional costs of $3,830,000 were incurred. The company’s fiscal year-end is December 31. This project does not qualify for revenue recognition over time. Required:1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years.2a. Prepare journal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurred).2b. Prepare journal entries for 2022 to record the transactions described (credit…
Assume that Blossom Construction Company has a non-cancellable contract to construct a $5,400,000 bridge at an estimated cost of $4,000,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. (Note that, by the end of 2024, Blossom has revised the estimated total cost from $4,000,000 to $4,027,000.) Assume that progress billings are non-refundable. Assume that the company uses the completed-contract method. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year (To record cost of construction) (To record progress billings) (To record collections) 2023 (To record revenues) $1,000,000 3,000,000 958,000 909,000 2024 $2,899,440 1,127,560 2,479,000 1,819,000 What would the journal entries be for 2025? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required,…
Assume that Sunland Construction Company has a non-cancellable contract to construct a $4,520,000 bridge at an estimated cost of $4,068,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. Assume that progress billings are non-refundable. 2023 2024 2025 Costs to date (12/31) $1,017,000 $2,928,960 $4,576,500 Estimated costs to complete (12/31) 3,051,000 1,647,540 0 Progress billings during the year 968,000 2,418,000 1,134,000 Cash collected during the year 817,000 1,897,000 1,806,000 The revised estimates for the bridge contract are as follows. 2023 Original Estimates 2024 Revised Estimates Contract price $4,520,000 $4,520,000 Estimated total cost 4,068,000 4,576,500* Estimated gross profit $452,000 Estimated loss $(56,500) *$2,928,960 + $1,647,540 (a1) Under the percentage-of-completion method, calculate…
Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $159 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Years 2023 2024 2025 Actual costs incurred in each year $ 43 million $ 71 million $ 48 million Years 2023 2024 2025 Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project? Note: Enter "None" if there is no requirement of recognizing profit or loss. Loss amounts should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Gross Profit (or Loss) recognized Gross profit Gross profit Gross profit Estimated remaining costs to complete t project (measured at December 31 of each year) $ 86 million. $ 71…
Please give working notes and proper explanation of solution
Hansaben
Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $149 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Years 2023 2024 2025 Actual costs incurred in each year $ 42 million $ 69 million, $ 47 million Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project? Years 2023 2024 2025 Note: Enter "None" if there is no requirement of recognizing profit or loss. Loss amounts should be indicated with a minus sign. Enter your answers in millions (1.e., 10,000,000 should be entered as 10). Estimated remaining costs to complete the project (measured at December 31 of each year) $ 84 million $ 69 million $0 million Gross Profit (or Loss) recognized million million…
Indiana Company began a construction project in 2024 with a contract price of $162 million to be received when the project is completed in 2026 During 2024 Indiana incurred $35 million of costs and estimates an additional $15 million of costs to complete the project Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed in 2025, Indiana incurred additional costs of $59 milion and estimated an additional $38 million in costs to complete the project indiana Note: Do not round intermediate calculations. Multiple Choice recognized $911 milion gross profe on the project in 2025 recognized $9.00 million gross prefit on the project in 2025 ced $3000 mon gress profe on the project in 2025
5) In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 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. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 2022 2023 Costs incurred…
Required information [The following information applies to the questions displayed below.] 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 Estimated costs to complete as of year-end Billings during the year $ 2,542,000 5,658,000 2,020,000 $ 3,772,000 1,886,000 4,294,000 $ 2,074,600 0 Cash collections during the year 1,810,000 3,800,000 3,686,000 4,390,000 Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs incurred). 2-c. In the journal below, complete the necessary journal…