E18-18 (Long-Term Contract Reporting) Berstler Construction Company began operations in 2012. Con- struction activity for the first year is shown below. All contracts are with different customers, and any work remaining at December 31, 2012, is expected to be completed in 2013. Project 123 Total Contract Price $ 560,000 670,000 520,000 $1,750,000 Billings through 12/31/12 $360,000 220,000 500,000 $1,080,000 Cash Collections through 12/31/12 $340,000 210,000 440,000 $990,000 Contract Costs Incurred through 12/31/12 $450,000 126,000 330,000 $906,000 Estimated Additional Costs to Complete $130,000 504,000 -0- $634,000 Instructions Prepare a partial income statement and balance sheet to indicate how the above information would be

E18-18 (Long-Term Contract Reporting) Berstler Construction Company began operations in 2012. Con- struction activity for the first year is shown below. All contracts are with different customers, and any work remaining at December 31, 2012, is expected to be completed in 2013. Project 123 Total Contract Price $ 560,000 670,000 520,000 $1,750,000 Billings through 12/31/12 $360,000 220,000 500,000 $1,080,000 Cash Collections through 12/31/12 $340,000 210,000 440,000 $990,000 Contract Costs Incurred through 12/31/12 $450,000 126,000 330,000 $906,000 Estimated Additional Costs to Complete $130,000 504,000 -0- $634,000 Instructions Prepare a partial income statement and balance sheet to indicate how the above information would be

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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*E17.33 (LO 5, 6) (Recognition of Profit on Long-Term Contracts) During 2025, Nilsen 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 $400,000 600,000 300,000 270,000 2026 $825,000 275,000 900,000 810,000 2027 $1,070,000 -0- 1,600,000 1,425,000 Instructions a. Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. b. Prepare all necessary journal entries for 2026. c. Compute the amount of gross profit to be recognized each year, assuming the cost-recovery method is used.
During 2020, Grouper Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $370,000 $869,790 $1,080,000 Estimated costs to complete 630,000 231,210 –0– Billings to date 302,000 900,000 1,590,000 Collections to date 267,000 804,000 1,415,000 (a) Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2020 $enter a dollar amount Gross profit recognized in 2021 $enter a dollar amount Gross profit recognized in 2022 $enter a dollar amount
48. ABC Construction Company began work on a contract in 2022 and completed the contract in 2023. The total contact price was P8,500,000. Information related to the construction project are as follows: 2022 2023 Costs incurred during the year P1,200,000 P6,250,000 Estimated costs to complete 4,800,000 - Progress billings during the year 1,450,000 7,050,000 Collections during the year 800,000 6,000,000 How much is the receivable balance as of December 31, 2023?
14. What is the Construction in Progress, net of Progress Billings at December 31, 2021, using zero profit method? 250,000 liability 250,000 asset 240,000 asset 240,000 liability Any other amount
8. How much is the Gross Profit/Loss Realized in 2018? * Triple Take Construction Co. began construction of a project in 2017 for a contract price of P9,600,000. The project is to be completed in 4 years or in the year 2021. The following are the details regarding the construction project 2017 2018 2019 Costs inenered to dnte Estimsted cost to complete Progess Billings to dnte Cash Collectiona for the year 2160,000 4,500,000 7,520,000 6840,000 5,500,000 1,690, 000 2,304,000 4,320,000 7,680,000 1,728.000 3,240,000 5,760,000 9. How much is the Gross Profit/Loss Realized in 2019? * Xurpas Homes entered into a construction agreement in 2018 for the construction of condominium buildings. The original contract price was P20,000,000 but a change order was issued in 2019 that increases the price by P2,000,000. The percentage of completion method is used by the company in recognizing revenue. The following are information regarding the company. 2018 10,200,000 10,200,000 9,800,000 8,760,000…
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Explain clearly
36 Construction is constructing an office building under contract for Election Cafe. The contract calls for progress billings and payments of P620,000 each quarter. The total contract price is P7,440,000 and RegisterToVote estimates total costs of P7,100,000. RegisterToVote estimates that the building will take 3 years to complete, and commences construction on January 2, 2020. 36 At December 31, 2020, RegisterToVote estimates that it is 30% complete with the construction, based on costs incurred. What is the total amount of Revenue from Long-Term Contracts recognized for 2020 and what is the balance in the Accounts Receivable account assuming Election Cafe has not yet made its last quarterly payment? Revenue - 2,232,000 ; AR - 620,000 Revenue - 2,130,000 ; AR - 620,000 Revenue - 2,130,000 ; AR - 2,480,000 Revenue - 2,480,000 ; AR - 2,480,000 37At December 31, 2021, RegisterToVote Construction estimates that it is 75% complete with the building; however, the estimate of total costs…
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Answer is $1,800,000. Please explain the reasoning and calculations
3. The following details apply to a contract where performance obligations are satisfied over time at 31 December 2015. Total contract revenue Costs to date Estimated costs to 40,000 completion Amounts invoiced 70,000 Amount paid up to 45,000 31.12.2015 The contract is agreed to be 40% complete at 31 December 2015. 100,000 50,000 Required: Show how a contract would be reflected in the statement of financial position and in the statement of profit or loss at 31 December 2015 under IERS 15 Revenue from contracts with customers.
Question 22 of 30.Ava Limited., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.8 million beginning September 1, 2015, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2017. The following data pertain to the construction period. 2015 2016 2017 Costs to date $867,000 $1,804,800 $2,346,000 Estimated costs to complete 1,683,000 1,015,200 0 Progress billings to date (non-refundable) 921,000 2,296,000 2,800,000 Cash collected to date 767,000 2,177,000 2,800,000 a) Calculate the amount of revenue to be recognized in 2015 and 2016.