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 $ $20,000 41400 * Your answer is incorrect. What was the initial estimated total income before tax on this contract? Income before tax on this contract $ 4500 Attempts: 2 of 15 used

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 $ $20,000 41400 * Your answer is incorrect. What was the initial estimated total income before tax on this contract? Income before tax on this contract $ 4500 Attempts: 2 of 15 used

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The Leto Construction Company began work on a $15,000 contract on 1/1/22. Planned completion was in 2024. The Percentage-of Completion method is used. Given the following at 12/31/22: Costs incurred to date Estimated costs to complete Billings to date Collections to date December 31, 2022 $2,500 9,500 4,000 3,800 The balance sheet location and the net amount of the 12/31/22 Combined CIP and Billings accounts are: Select one: O a. Current Liability of $1,500 O b. Current Liability of $200 c. Current Asset of $1,500 d. Current Liability of $875
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 Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Answer is complete and correct. 2024 $ 2,400,000 5,600,000 2,000,000 1,800,000 2024 $ 3,000,000 $ $ 600,000 $ 2025 2026 4,500,000 $ 2,500,000 900,000 $ 300,000 2025 $ 3,600,000 2,000,000 4,000,000 3,600,000 2026 $ 2,200,000 0 4,000,000 4,600,000
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…
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 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). 2024 $ 2,739,000 5,561,000 2,300,000 2,100,000 Cost incurred during the year Estimated costs to complete as of year-end 2025 $ 3,735,000 1,826,000 4,174,000 3,900,000 2024 $ 2,430,000 5,630,000 2-b. In the journal below, complete the necessary journal entries for the year…
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.
Pharoah Construction Company uses the percentage-of-completion method of accounting. In 2025, Pharoah began work under a contract with a contract price of $1,650,000. Other details follow: Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year (a) Your answer is incorrect. 2025 $1,093,400 446,600 933,400 260,000 2026 $1,510,000 -0- 1,650,000 1,650,000 What portion of the total contract price would be recognized as revenue in 2025? In 2026?
Oriole Construction Company began operations on January 1, 2025. During the year, Oriole Construction entered into a contract with Winds Corp. to construct a manufacturing facility. At that time, Oriole estimated that it would take 5 years to complete the facility at a total cost of $4.484,000. The total contract price for construction of the facility is $5,972,000. During the year, Oriole incurred $1,082,400 in construction costs related to the construction project. The estimated cost to complete the contract is $4,329,600. Winds Corp. was billed and paid 25% of the contract price. (a) Prepare schedules to compute the amount of gross profit to be recognized for the year ended December 31, 2025, and the amount to be shown as "costs and recognized profit in excess of billings" or "billings in excess of costs and recognized profit" at December 31, 2025, under each of the following methods. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses…
Assume that Crane Construction Company has a non-cancellable contract to construct a $4,640,000 bridge at an estimated cost of $4,176,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. (Note that, by the end of 2024, Crane has revised the estimated total cost from $4,176,000 to $4,228,200.) Assume that progress billings are non-refundable. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year (a1) Account Titles and Explanation (To record cost of construction) (To record progress billings) (To record collections) (To record revenues) 2023 (To record construction expense) 3,173,760 $1,002,240 $2,959,740 $4,228,200 994,000 2024 834,960 1,268,460 2,483,000 Prepare all journal entries required for Crane to account for this contract for 2023. (Credit account titles are automatically indented when the amount is entered. Do not…
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: 2026 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2024 $ 2,624,000 5,576,000 2,200,000 2025 $ 3,690,000 1,886,000 4,114,000 $ 2,074,600 3,686,000 2,000,000 3,800,000 4,200,000 Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Cost incurred during the year Estimated costs to complete as of year-end 2024 $ 2,420,000 5,620,000 2025 2026 $ 3,810,000 3,120,000 $ 3,220,000 в 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. 2024 2025 2026 Cost incurred during the year Estimated costs to complete as of…
Required information [The following information applies to the questions displayed below.] In 2021, 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 2023. 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 Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) 2021 2022 $2,610,000 $3,162,000 6,390,000 2,028,000 2,100,000 1,850,000 2021 2022 Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.) 2023 $2,230,800 2023 0 3,672,000 4,228,000 5,150,000 3,000,000
In 2024, KP Building Incorporated began work on a four-year construction project (called Cincy One). The contract price is $460 million. KP recognizes revenue on this contract over time according to percentage of completion. At the end of 2024, the following financial statement information indicates the results to date for Cincy One: INCOME STATEMENT: Gross profit (before-taxes) recognized in 2024 $ 43 million BALANCE SHEET: Accounts receivable from construction billings $ 30 million Construction in progress $ 86 million Less: Billings on construction $ (96 million) Net billings in excess of construction in progress $ 10 million Required: Compute the following, placing your answer in the spaces provided and showing supporting computations below. Note: Round your percentage answer to the nearest whole number. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).
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…