Manama Corporation started its operations on January 1, 2020. On December 31, 2020, the following information was available for the two construction contracts.CashCollectionsEstimatedAdditionalCosts toCostBillingsthrough12/31/20Incurredthrough12/31/20$424,000Totalthrough12/31/20$310,000ContractContractNo. INo. 2PriceS500,000450,000$340,000400,000CompleteS101,000400,000320,00080,000If Manama Corporation uses the Cost-Recovery Method:Required 1: For contact No. 1:a. How much gross profit or gross loss should be recognized in 2020, and Why?b. Prepare the necessary journal entry?

Name: Manama Corporation started its operations on January 1, 2020. On Dece
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Description: Manama Corporation started its operations on January 1, 2020. On December 31, 2020, the following information was available for the two construction contracts.CashCollectionsEstimatedAdditionalCosts toCostBillingsthrough12/31/20Incurredthrough12/31/

Under cost recovery method, gross profit or loss in recognized when all the costs of the contract…

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Manama Corporation started its operations on January 1, 2020. On December 31, 2020, the following informate Cash Collections through 12/31/20 Cost Estimated Total Contract Billings through 12/31/20 $340,000 400,000 Incurred through 12/31/20 $424,000 320,000 Additional Costs to Contract No. I No. 2 Price S500,000 450,000 Complete SI01,000 80,000 $310,000 400,000 If Manama Corporation uses the Cost-Recovery Method: Required 1: For contact No. 1: a. How much gross profit or gross loss should be recognized in 2020, and Why? b. Prepare the necessary journal entry?

Manama Corporation started its operations on January 1, 2020. On December 31, 2020, the following informate Cash Collections through 12/31/20 Cost Estimated Total Contract Billings through 12/31/20 $340,000 400,000 Incurred through 12/31/20 $424,000 320,000 Additional Costs to Contract No. I No. 2 Price S500,000 450,000 Complete SI01,000 80,000 $310,000 400,000 If Manama Corporation uses the Cost-Recovery Method: Required 1: For contact No. 1: a. How much gross profit or gross loss should be recognized in 2020, and Why? b. Prepare the necessary journal entry?

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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