Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2023, Ivanhoe began work under a non- cancellable contract #E2-D2, which provided for a contract price of $2,237,000. Other details follow: Costs incurred during the year Estimated costs to complete, as at December 31 Billings during the year (non-refundable) Collections during the year 2023 $616,740 1,006,260 414,000 352,000 2024 $1,441,000 0 1,344,000 1,508,000

Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2023, Ivanhoe began work under a non- cancellable contract #E2-D2, which provided for a contract price of $2,237,000. Other details follow: Costs incurred during the year Estimated costs to complete, as at December 31 Billings during the year (non-refundable) Collections during the year 2023 $616,740 1,006,260 414,000 352,000 2024 $1,441,000 0 1,344,000 1,508,000

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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Crane Corporation uses the completed-contract method. At the end of the first year of a $9023000 contract, the following information is available: Costs to date: Estimated costs to complete Progress billings during the year Cash collected during the year $2021000 O $991000 O $247750 O $275000 O $0 6011000 1811000 1536000 In the first year, Crane should recognize gross profit of Crane Corporation uses the co information is available: Costs to date: Estimated costs to complete Progress billings during the y Cash collected during the yea In the first voor Crano should r Snipping Tool Screenshot copied t Select here to mark
Answer is $1,800,000. Please explain the reasoning and calculations
M5-13. Computing Revenues under Long-Term Contracts Camden Corporation agreed to build a warehouse for a client at an agreed contract price of $900,000. Ex- pected (and actual) costs for the warehouse follow: 2016, $202,500; 2017, $337,500; and 2018, $135,000. The company completed the warehouse in 2018. Compute revenues, expenses, and income for each year 2016 through 2018, and for all three years combined, using the cost-to-cost method.
1. During 2020, Bay Construction started a new construction job with a contract price of $750 million. Bay has a 12/31 fiscal year end. Bay has determined that the contract does not qualify for revenue recognition over time. The contract was completed on 12/31/22 with the following information ($ in millions): Costs incurred in the period (paid in cash) Estimated costs to complete at 12/31 Billings on contract in the period Cash collected in the period 2020 180.0 2021 2022 432.0 150.0 540.0 153.0 -0- 150 350 250 200 400 150 What is the amount of gross profit (loss) on the contract that Bay would recognize on the Income Statement in 2020, 2021 and 2022? You must show supporting work (calculations/explanations) to receive credit for your answers. Gross Profit (Loss) 2020 2021 2022