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 dollar amount Click if you would like to Show Work for this question: Open Show Work
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 dollar amount Click if you would like to Show Work for this question: Open Show Work
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 6P
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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.
(a) How much cash was collected in 2020 on this contract?
(b) What was the initial estimated total income before tax on this contract?
|
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 dollar amount
|
| Click if you would like to Show Work for this question: |
Open Show Work
|
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