In 2013, Tarlo Company agrees to construct a highway for Brice County over a 3-year period (2013 through 2015). The contract price is $1,200,000, and theconstruction costs (both actual and estimated) total $630,000 for the 3 years. Thepercentage completed at the end of each year is as follows: 2013, 15%; 2014,75%; 2015, 100%.1. Prepare a schedule showing the amount of gross profit that Tarlo recognizeseach year using the percentage-of-completion method.TarloGrossCompanyProfit:Percentage-ofCompletionMethod2013 through 20152013S20142015Total gross profit S2. Prepare a schedule showing the amount of gross profit that Tarlo recognizeseach year using the completed-contract method. If an amount is zero, enter "0".TarloCompanyGrossCompleted-Contract2013 through 2015201320142015STotal gross profit SProfit:Method

Explanation of Gross Profit:Gross profit is a financial metric that represents the difference…

Answered: In 2013, Tarlo Company agrees to…

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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In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is as follows: 2024 2025 2026 $ 3,600,000 $4,050,000 $1,485,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 5,400,000 3,000,000 4,650,000 2,800,000 4,600,000 1,350,000 0 2,350,000 2,600,000 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs…
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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 Using the percentage-of-completion method, calculate the percentage complete for 2015 and 2016. (Round answers to 2 decimal places, e.g. 61.75%.)
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On January 1, 2018 The Village of Port Jefferson engaged to Frog Construction company to construct amunicipal office complex. The three-year a to receive 10 million in cash payments from the city in threeinstallments: 25% when the project was 30% complete; 25% when the project was 60% complete; and50%when the project was fully complete. The contract required that Frog's completion estimates be certifiedby an independent consultant before payments were made.During the first year of the contract, Frog completed 30% of the contract and incurred costs of 2,490,000.During the second year, the project was certified as being 60% complete and Frog incurred costs of3,100,000.During the third year, Frog completed the project and incurred costs of 3,110,000.Assuming Frog had no other revenues or expenses, determine the profit on construction for 2018, 2019,and 2020 under the following methods: A. Percentage Calculation B. Completed Contract
On February 1, 2015, Jaddua Johnston Contractors agreed to construct a building for Satish Thapa at a contract price of $5,800,000. Johnston estimated total construction cost would be $4,000,000 and the project would be finished in 2017. Information relating to the costs and billings for this contract is as follows: 2015 2016 2017 Totals Total costs incurred to-date $ 1,500,000 $ 2,640,000 $ 4,600,000 $ 8,740,000 Estimated costs to complete 2,500,000 1,760,000 4,260,000 Customer billings to-date |Collections to-date 2,200,000 11,800,000 2,000,000 4,000,000 3,500,000 5,600,000 5,500,000 11,000,000 Required: (1) prepare a schedule showing gross profit to be recognized each year under % completion method. (2)Compute the gross profit to be recognized in 2017 under the completed-contract method. (3) Prepare Journal entries for 2016 under % of completion method. #(1) Schedule of gross profit recognized under % of Completion method: 2015 2016 2017
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Indiana Co. began a construction project in 2018 with a contract price of $162 million to be received when the project is completed in 2020. During 2018, Indiana incurred $33 million of costs and estimates an additional $85 million of costs to complete the project. Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed. Suppose that, in 2019, Indiana incurred additional costs of $64 million and estimated an additional $51 million in costs to complete the project. Indiana (Do not round your percentage calculated): Multiple Choice Recognized $3.00 million loss on the project in 2019. Recognized $6.13 million gross profit on the project in 2019. Recognized $3.13 million loss on the project in 2019. Recognized $3.13 million gross profit on the project in 2019.
Tigasin Builders Company began its construction activities in 2017. At the end of its first year's operation, the following projects (and other relevant information) are still uncompleted: Collections thru 12/31 Project Contract Actual costs Est cost to Billings thru 12/31 Price thru 12/31 Complete, 12/31 Angeles City 15,000,000 Palo City 10,000,000 5,500,000 9,000,000 5,250,000 12,400,000 3,390,000 3,100,000 13,560,000 17,500,000 Tigasin Builders will use the cost-to-cost percentage of completion in accounting for the Angeles City project, while the cost recovery method will be used for the Palo City project. 1. Compute the Construction Revenue to be recognized by Tigasin Builders for the Angeles City project in 2017. 2. Determine how (1) the Angeles City Project and (2) the Palo City Project will be shown on the year-end balance sheet.
J
In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is as follows: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year 2024 $ 2,523,000 6,177,000 2,070,000 2025 $ 3,177,000 1,800,000 3,630,000 2026 $ 1,980,000 0 Cash collections during the year 1,835,000 3,400,000 4,300,000 4,765,000 Westgate recognizes revenue over time according to percentage of completion. Problem 6-10 (Algo) Part 5 5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following costs incurred and costs to complete information. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign. Costs incurred during the year Estimated costs to complete as of year-end 2024 $…
Blue Construction Company began work on a $979,000 construction contract in 2017. During 2017, Blue incurred costs of $402,000, billed its customer for $318,000, and collected $238,000. At December 31, 2017, the estimated future costs to complete the project total $630,000. Prepare Archer'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 O for the amounts. Round percent value to 2 decimal places, eg. 52.75 and final answers to O decimal places, eg.5,275) Account Titles and Explanation Debit Credit (a) (b)

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