Haft Construction Company has consistently applied the percentage-of-completion method. On January 10, 2014, Haft began work on a $3,000,000construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract:$ 300,000Gross profit recognized at 12/31/14Costs incurred 1/01/14 through 12/31/15Estimated cost to complete at 12/31/151,800,000600,000In its income statement for the year ended December 31, 2015, what amount of gross profit should Haft report?

Contract costing is like job costing where costing constitutes a unit of cost. It is used to measure…

Answered: Haft Construction Company has…

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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Kingbird Construction Company began work on a $418,500 construction contract in 2020. During 2020, Kingbird incurred costs of $285,500, billed its customer for $233,000, and collected $172,000. At December 31, 2020, the estimated additional costs to complete the project total $155,765.Prepare Kingbird’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) No. Account Titles and Explanation Debit Credit (a) enter an account title to record the transaction using the percentage-of-completion method enter a debit amount enter a credit amount enter an account title to record the transaction using the percentage-of-completion method enter a debit…
On January 1, 2021, Ka Leody Inc. entered into a long-term construction contract with fixed contract price of P 5,000,000. Ka Leody billed its client as follows: 30% during 2021, 40% during 2022 and the remainder at the end of project completion. The following data were provided by the cost accountant of the Ka Leody Inc: 2020 2021 2022 Cumulative cost incurred as of the end of the year P 2,200,000 P 3,600,000 P 4,800,000 Estimated remaining cost to complete at the end of the year P 3,300,000 P 900,000 What is the revenue to be recognized on December 31, 2021 under percentage of completion method ?
Cullumber Construction Co. uses the percentage-of-completion method. In 2024, Cullumber began work on a contract for $23200000; it was completed in 2025. The following cost data pertain to this contract: Year Ended December 31 2024 2025 Cost incurred during the year $8736000 $5720000 Estimated costs to complete at the end of year 5824000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 is ○ $3456000. ○ $8744000. $2920000. $3560000.
On January 1, 2021, Turnstile Construction Company Inc. contracted to build a medical practice office building for Medicine Points Inc. for a total contract price of $2,000,000. On January 1, Turnstile estimated that it would take three years to complete the building. On December 31, 2023, the building was completed. Following are contract costs incurred, estimated costs to complete the contract, and accumulated billings to Medicine Points Inc. for 2021, 2022, and 2023 At 12/31/21 At 12/31/22 At 12/31/23 Contract costs incurred to date $ 540,000 $1,600,000 Estimated costs to complete the contract 1,500,000 500,000 Billings to Medicine Inc. $2,200,000 -0. 300,000 1,400,000 2,000,000 Required: Assuming this contract meets the requirements for recognizing revenue over time, prepare schedules to compute the profit or loss Turnstile Company would recognize as a result of this contract for the years ended December 31, 2021, 2022, and 2023.
Please help me
- Oriole Construction Company began work on a $407,000 construction contract in 2025. During 2025, Oriole incurred costs of $272,000, billed its customer for $217,000, and collected $177,500. At December 31, 2025, the estimated additional costs to complete the project total $157,020. Prepare Oriole's journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the cost-recovery method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries. Do not round Intermediate calculations.) No. Account Titles and Explanation (a) (b) eTextbook and Medial List of Accounts Debit Credit
Bella Construction Co. uses the percentage-of-completion method. In 20x1, Bella began work on a contract for $2,477,005; it was completed in 20x2. The following cost data pertain to this contract: Year ended December 31, 20x1 Year ended December 31, 20x2 Costs incurred during the year $869,041 $559,369 Estimated costs to complete at the of year $494,825 - The amount of gross profit to be recognized on the income statement for the year ended December 31, 20x2 is: a. $553,770 b. $339,315 c. $1,048,595 d. $1,113,139
During 2007, Frank Corp. started a construction job with a total contract price of $2,800,000. It was completed on December 15, 2008. Additional data are as follows: 2007 2008 Actual costs incurred in current year $1,080,000 $1,220,000 Estimated remaining costs 1,080,000 — Billed to customer 960,000 1,840,000 Received from customer 800,000 1,920,000 Under the completed-contract method, what amount should Frank recognize as gross profit for 2008? Group of answer choices 500,000 $250,000 $180,000 $380,000
Shumpert, Inc. entered into a contract that was to take two years to complete, with an estimated cost of $2,257,600. The contract price was $3,160,640. Costs of the contract for 2014, the first year, totaled $1,693,200. a. What was the gross profit reported by the percentage of completion method for 2014?
Answer is $1,800,000. Please explain the reasoning and calculations
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…

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