Answered: Greet Construction completed the…

Business

Accounting

Greet Construction completed the remaining 25%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 9MC

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In 2019, PJD Construction Corporation began construction work under a 3-year contract. The contract price was P4,000,000. PJD uses the percentage-of-completion method/over time for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentation relating to this contract at December 31, 2019 was as follows: What is the recognized revenue in 2019?
The Lao Construction Company recognizes revenue over time according to percentage of completion for its long-term construction contracts. In 2024, Lao began work on a construction contract. Information on this contract at the end of 2024 is as follows: Cost incurred during the year $ 1,500,000 Estimated additional cost to complete 6,000,000 Gross profit recognized in 2024 250,000 What is the contract price (total revenue) on this contract?
In 2021, Crane Corporation began construction work under a three-year contract. The contract price is $ 480000. Crane uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2021, follow: Balance Sheet Accounts receivable—construction contract billings $ 192000 Construction in progress $ 600000 Less contract billings 480000 Costs and recognized profit in excess of billings 120000 Income Statement Income (before tax) on the contract recognized in 2021 $ 120000 How much cash was collected in 2021 on this contract? $ 480000 $ 48000 $ 288000 $ 192000
In 2025, Sunland Construction Corp. began construction work under a 3-year contract. The contract price was $1,090,000. Sunland uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2025, are shown below. Balance Sheet Accounts receivable Construction in process Less: Billings Costs and recognized profit in excess of billings Income Statement $16,600 $62,500 58,000 4,500 Income (before tax) on the contract recognized in 2025 (a) Your answer is correct. How much cash was collected in 2025 on this contract? (b) Portion of contract billings collected $ eTextbook and Media * Your answer is incorrect. $20,000 41400 What was the initial estimated total income before tax on this contract? Income before tax on this contract $ 4500 Attempts: 2 of 15 used
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In 2020, Blue Construction Corp. began construction work under a 3-year contract. The contract price was $1,060,000. Blue uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2020, are shown below. Balance Sheet Accounts receivable $16,600 Construction in process $63,700 Less: Billings 65,400 Costs and recognized profit in excess of billings -1,700 Income Statement Income (before tax) on the contract recognized in 2020 $19,110 (a) How much cash was collected in 2020 on this contract? Portion of contract billings collected $enter a dollar amount (b) What was the initial estimated total income before tax on this contract? Income before tax on this contract $enter a…
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At the beginning of 2021, Batangas Road Construction entered into a contract to build a road for the government. Construction will take four years. The following information as of December 31, 2021 is available for the contract: Total revenue according to contract 10,000,000 Total expected cost 8,000,000 Cost incurred during 2021 1,200,000 Assume that the company estimated percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2021? None 300,000 1,500,000
In 2020, Grouper Construction Corp. began construction work under a 3-year contract. The contract price was $1,060,000. Grouper uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2020, are shown below. Balance Sheet Accounts receivable $17,700 Construction in process $68,300 Less: Billings 61,300 Costs and recognized profit in excess of billings 7,000 Income Statement Income (before tax) on the contract recognized in 2020 $16,392 (a) How much cash was collected in 2020 on this contract? Portion of contract billings collected $enter a dollar amount (b) What was the initial estimated total income before tax on this contract? Income before tax on this contract $enter a…
Pharoah Construction entered into a contract to construct a bridge for a contract price of $2.95 million. Construction began in 2019 and was completed in 2021. Below are the details of the transactions related to the contract: 2019 2020 2021 Costs incurred during the year $649,000 $836,000 $693,900 Estimated costs to complete 1,427,800 515,000 0 Calculate the revenue, expenses and gross profit to be recognized each year using the percentage-of-completion method. (Round the percentage completion to 2 decimal places, e.g. 52.75% and other answers to 0 decimal places, e.g. 1,525.) 2019 2020 2021 Revenue $ $ $ Expenses Gross Profit $ $ $
Jhun Co. recognizes construction revenues and expenses using the percentage of completion method. During 2019, a single long-term contract was started, which continued through the year 2020. Information the project follows: 2019 Account receivable on contract 100,000 Construction expense 105,000 Construction in progress 122,000 Partial billings on contract 100,000 2020 Account receivable on contract 300,000 Construction expense 192,000 Construction in progress 364,000 Partial billings on contract 420,000 Profit recognized in 2019 should be? Profit recognized in 2020 should be?