During 2025, Sheridan Company started a construction job with a contract price of $1,600,000. The job was completed in 2027. The following information is available. Costs incurred to date Estimated costs to complete Billings to date Collections to date 2025 $404,000 606,000 300,000 272,000 2026 $830,680 262,320 906,000 810,000 2027 $1,069,000 -0- 1,600,000 1,416,000

During 2025, Sheridan Company started a construction job with a contract price of $1,600,000. The job was completed in 2027. The following information is available. Costs incurred to date Estimated costs to complete Billings to date Collections to date 2025 $404,000 606,000 300,000 272,000 2026 $830,680 262,320 906,000 810,000 2027 $1,069,000 -0- 1,600,000 1,416,000

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

Please do not give solution in image format thanku

During 2025, Sheridan Company started a construction job with a contract price of $1,600,000. The job was completed in 2027. The
following information is available.
Costs incurred to date
Estimated costs to complete
Billings to date
Collections to date.
2025
2026
$404,000 $830,680 $1,069,000
262,320
606,000
300,000
272,000
906,000
810,000
2027
-0-
1,600,000
1,416,000

Compute the amount of gross profit to be recognized each year, assuming the cost-recovery method is used.
Gross profit
2025
2026
$
2027

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As of August 31, 20-- Carley's Car Care's general ledger balances, listed in alphabetical order of accounts, are as follows: Accounts Accounts Payable Accounts Receivable Advertising Expense Cash Equipment Income from Services M. Carley, Capital (beginning) M. Carley, Drawing Prepaid Insurance Rent Expense Supplies Utilities Expense Wages Expense Balance $4,639.00 544.00 1,107.00 30,539.00 18,950.00 21,378.00 42,000.00 6,300.00 840.00 2,100.00 1,115.00 1,076.00 5,446.00