Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2025, Ivanhoe began work undercontract #E2-D2, which provided for a contract price of $2,237,000. Other details follow:Costs incurred during the yearEstimated costs to complete, as of December 31Billings during the yearCollections during the year(a)Your answer is correct.Revenue recognized in 2025Revenue recognized in 2026LAWhat portion of the total contract price would be recognized as revenue in 2025? In 2026? (Do not round intermediate calculations.)$2025$616,7401,006,260414,000 1,717,000352,0002026$1,441,0008500601386940-0-1,508,000 * Your answer is incorrect.Assuming the same facts as those above except that Ivanhoe uses the cost-recovery method of accounting, what portion of thetotal contract price would be recognized as revenue in 2026?Revenue recognized in 2026$2237000

Ensuring that financial statements correctly depict a company's financial success and health…

Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2025, Ivanhoe began work under 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 of December 31 Billings during the year Collections during the year (a) Your answer is correct. 10 Revenue recognized in 2025 $ 2025 $616,740 1,006,260 414,000 352,000 What portion of the total contract price would be recognized as revenue in 2025? In 2026? (Do not round intermediate calculations.) Revenue recognized in 2026 $ 850060 2026 $1,441,000 1386940 -0- 1,717,000 1,508,000

Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2025, Ivanhoe began work under 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 of December 31 Billings during the year Collections during the year (a) Your answer is correct. 10 Revenue recognized in 2025 $ 2025 $616,740 1,006,260 414,000 352,000 What portion of the total contract price would be recognized as revenue in 2025? In 2026? (Do not round intermediate calculations.) Revenue recognized in 2026 $ 850060 2026 $1,441,000 1386940 -0- 1,717,000 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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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: 2021 2022 2023 Cost incurred during the year $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the…
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
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