Koolman Construction Company began work on a contract in 2019. The contract price is $3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: 2019 2020 Costs incurred during the year $600,000 $700,000 Estimated costs to complete, December 31 1,400,000 1,200,000 Billings during the year 500,000 850,000 Collections during the year 400,000 800,000 Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. If there is a loss a minus sign must be entered. 2. Prepare the appropriate sections of the income statement for each year. If there is a loss a minus sign must be entered. 3. Prepare the appropriate sections of the ending balance sheet for the year 2019. 4. Prepare the appropriate sections of the ending balance sheet for 2020
Koolman Construction Company began work on a contract in 2019. The contract price is $3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: 2019 2020 Costs incurred during the year $600,000 $700,000 Estimated costs to complete, December 31 1,400,000 1,200,000 Billings during the year 500,000 850,000 Collections during the year 400,000 800,000 Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. If there is a loss a minus sign must be entered. 2. Prepare the appropriate sections of the income statement for each year. If there is a loss a minus sign must be entered. 3. Prepare the appropriate sections of the ending balance sheet for the year 2019. 4. Prepare the appropriate sections of the ending balance sheet for 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Koolman Construction Company began work on a contract in 2019. The contract price is $3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows:
| 2019 | 2020 | |
| Costs incurred during the year | $600,000 | $700,000 |
| Estimated costs to complete, December 31 | 1,400,000 | 1,200,000 |
| Billings during the year | 500,000 | 850,000 |
| Collections during the year | 400,000 | 800,000 |
Required:
1. Compute the gross profit or loss recognized in 2019 and 2020. If there is a loss a minus sign must be entered.
2. Prepare the appropriate sections of the income statement for each year. If there is a loss a minus sign must be entered.
3. Prepare the appropriate sections of the ending
4. Prepare the appropriate sections of the ending balance sheet for 2020.
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