Dueplo Construction has agreed to build an addition for an office building for a contract price of $2,000,000. The period of construction is estimated to be three years. The contract is signed on January 1 of Year 1, and con- struction begins immediately. The building is completed on December 31 of Year 3. Data on costs incurred, and estimated costs to complete over the period of construction follow.
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- Star Construction Corporation has a contract to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 20×5. Actual costs were in line with estimated costs for 20×5 and 20×6. In 20×7, actual costs exceeded estimated costs by $150,000. Total construction costs incurred in each year were as follows: 20X5: $2,700,00020X6: $4,500,00020X7: $1,800,000 Progress billings based on the amount of work completed were collected each year. Star Construction uses the percentage-of-completion method. The percentage-of-completion is based on costs incurred compared with estimated total costs of the project. Company also billed the client and collected the following payments Year Billings Payments Received 20X5: $2,300,000 $2,100,000 20X6: $4,900,000 $4,700,000 20X7: $3,750,000 $4,150,000…Buildit Corp. was contracted to construct a building for $2,440,000. The contract provided for progress payments. Buildit's accounting year ends 31 December. Work began under the contract on 1 March 20X3, and was completed on 30 November 20X5. Construction activities are summarized below by year: 20x3 20x4 20X5 Construction coats incurred during the year, $610,000; estimated costs to complete, $1,110,000; progress billings during the year, $520,000; and collections, $430,000. Construction costs incurred during the year, $980,000; estimated costs to complete, $350,000; progress billing during the year, $1,690,000; and collections, $1,430,000. Construction costs incurred during the year, $330,000. Because the contract was completed, the remaining balance was billed and later collected in full per the contract. Required: 1. Prepare Buildit's journal entries to record these events. Assume that percentage of completion is measured by the ratio of costs incurred to date divided by total…Star Construction Corp. has a contract to construct a building for $10,876,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,801,600. Construction commenced on 4 February 20X5. Actual costs were in line with estimated costs for 20X5 and 20X6. In 20X7, actual costs exceeded estimated costs by $138,400. Total construction costs incurred in each year were as follows: 20X5 20X6 20X7 Billings (and cash collections) each year were as follows: 20X5 20X6 20X7 $2,682,000 $4,470,000 $1,788,000 20X5 20X6 20X7 Total $2,284,500 $4,867,000 $3,724,500 Required: 1. Calculate the revenues and gross profit for the construction project for each of the three years assuming the company uses inputs to measure progress. (Round intermediate calculations to 2 decimal places. Round final answers to nearest whole dollars.) Year Revenue Gross Profit $ 3,311,082 $ 629,082 5,048,536 578,536 3,206,464 1,418,464 $…
- JUBAIL BUILDERS is constructing a multi-unit residential complex. In the prior year, JUBAIL BUILDERS entered into a contract with a customer for a specific unit that is under construction. JUBAIL has determined that the contract is a single performance obligation satisfied over time. JUBAIL BUILDERS gathered the following information for the contract during the year. JUBAIL BUILDERS-Year Ended December 31, 2018: Costs to date 10,500,000 Future expected costs 7,000,000 Work certified to date 12,600,000 Expected Sales value 22,400,000 Revenue taken in earlier period 8,400,000 Costs taken in earlier periods 6,650,000 Calculate the amounts to be included in the statement of profit or loss in respect of revenue and costs for the year ended December 31, 2018 on both methods (I) Input Method (cost basis), and (II) Output Method (Sales Basis) Calculate the total expected profit for the year 2018?Star Construction Corp. has a contract to construct a building for $10,868,900. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,793,500. Construction commenced on 4 February 20X5. Actual costs were in line with estimated costs for 20X5 and 20X6. In 20X7, actual costs exceeded estimated costs by $140,500. Total construction costs incurred in each year were as follows: 20X5 20X6 20X7 $2,680, 200 $4,467,000 $1,786,800 Billings (and cash collections) each year were as follows: 20X5 20X6 20X7 $2,283,000 $4,863,800 $3,722,100 Required: 1. Calculate the revenues and gross profit for the construction project for each of the three years assuming the company uses inputs to measure progress. (Round intermediate calculations to 2 decimal places. Round final answers to nearest whole dollars.)Construction Corporation has a contract to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 20×5. Actual costs were in line with estimated costs for 20×5 and 20×6. In 20×7, actual costs exceeded estimated costs by $150,000.Total construction costs incurred in each year were as follows:20X5: $2,700,00020X6: $4,500,00020X7: $1,800,000Progress billings based on the amount of work completed were collected each year. Star Construction uses the percentage-of-completion method. The percentage-of-completion is based on costs incurred compared with estimated total costs of the project.Company also billed the client and collected the following paymentsYear Billings Payments Received20X5: $2,300,000 $2,100,00020X6: $4,900,000 $4,700,00020X7: $3,750,000 $4,150,000Required: Calculate Net income for the construction…
- On January 1, 2011, DMCI Inc. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year 12/31/2011 12/31/2012 12/31/2013 Costs incurred during the year ? P1,500,000 P3,740,000 Realized gross profit/(loss) during the year P750,000 (P250,000) (P800,000) Percentage of completion as of the end of the year 37.5% 50% 80% What is the balance of Construction in Progress on DMCI Inc.’s Statement of Financial Position on December 31, 2013? A. 7,480,000 B. 7,940,000 C. 8,000,000 D. 8,280,000On January 1, 2011, DMCI Inc. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably, and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year 12/31/2011 12/31/2012 12/31/2013 Costs incurred during the year? ? P1,500,000 P3,740,000 Realized gross profit/(loss) during the year Percentage of completion as of the end of the year 37.5% P750,000 (P250,000) (P800,000) 50% 80% What is the balance of Construction in Progress on DMCI Inc.'s Statement of Financial Position on December 31,2013?On July 1, 2025, Sunland Construction Company Inc. contracted to build an office building for Novak Corp. for a total contract price of $1,920,000. On July 1, Sunland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Novak for 2025, 2026, and 2027. At 12/31/25 At 12/31/26 At 12/31/27 Contract costs incurred to date Estimated costs to complete the contract Billings to Novak $273,600 1,246,400 $1,171,600 $2,127,600 848,400 -0- 300,000 1,090,000 1,870,000 (a1) Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a result of this contract for the year ended December 31, 2025. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.) Costs to Date (12/31/25) Estimated Costs to Complete…
- On January 1, 2021. Robredo Co. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year 12/31/2021 12/31/2022 12/31/2023 P 3740000 Costs incurred during the year Realized gross profit/(loss) during the year Percentage of completion as of the end of the year ? ? P750,000 (P250,000) (P800,000) 50% 37.5% ? What is the balance of Construction in Progress on December 31, 2023?On July 1, 2025, Wildhorse Construction Company Inc. contracted to build an office building for Indigo Corp. for a total contract price of $1,880,000. On July 1, Wildhorse estimated that it would take between 2 and 3 years to complete the building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Indigo for 2025, 2026, and 2027. At 12/31/25 At 12/31/26 At 12/31/27 Contract costs incurred to date $286,900 $1,122,900 $2,066,700 Estimated costs to complete the contract 1,223,100 847,100 -0- Billings to Indigo 300,000 1,100,000 1,830,000 (a1) (a2) Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a result of this contract for the year ended December 31, 2026. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.) × Your answer is incorrect. > 2026…On July 1, 2025, Torvill Construction Company Inc. contracted to build an office building for Gumbel Corp. On July 1, Torvill estimated that it would take between 2 and 3 years to complete the building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2025, 2026, and 2027. Total contract price $ 2,200,000 Contract costs incurred to date Estimated costs to complete the contract Progress Billings to Gumbel during year Instructions a. b. At 12/31/25 At 12/31/26 At 12/31/27 300,000 $1,200,000 $ 2,100,000 $ 1,200,000 300,000 800,000 1,100,000 800,000 Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2025, 2026, and 2027. (Ignore income taxes.) Using the cost recovery method, prepare a schedule to compute the profit or…