Manson Construction Corp. has consistently used the percentage-of-completion method. In 2020, Manson started work on a $ 10,500,000 construction contract that was completed in 2021. The following information was taken from Manson’s 2020 accounting records: Billings to date.................................................... $ 3,300,000 Costs incurred..................................................... 3,150,000 Collections to date............................................. 2,100,000 Estimated costs to complete............................ 6,300,000 Under the earnings approach, what amount of gross profit should Manson recognize in 2020 on this contract?
Manson Construction Corp. has consistently used the percentage-of-completion method. In 2020, Manson started work on a $10,500,000 construction contract that was completed in 2021.
The following information was taken from Manson’s 2020 accounting records:
|
Billings to date |
$3,300,000 |
|
|
Costs incurred |
3,150,000 |
|
|
Collections to date |
2,100,000 |
|
|
Estimated costs to complete |
6,300,000 |
What is the amount of revenue that will be recorded in 2020?
In 2020, Pop Construction Corp. began work on a contract for $ 3,700,000. Other details follow:
| 2020 | |
| Costs incurred during the year.................................................................... | $ 1,800,000 |
| Estimated costs to complete as of December 31................................... | 1,200,000 |
| Billings during the year................................................................................. | 1,650,000 |
| Collections during the year......................................................................... | 975,000 |
Pop uses the percentage-of-completion method. For calendar 2020, Pop should report gross profit of
Mobey Construction Corp. uses the percentage-of-completion method. In 2020, Mobey began work on a contract for $2,475,000 which was completed in 2021. Data on the costs are:
|
Year Ended December 31 |
||||
|
2020 |
2021 |
|||
|
Costs incurred |
$877,500 |
$630,000 |
||
|
Estimated costs to complete |
585,000 |
— |
For the calendar years 2020 and 2021, Mobey should recognize gross profit of
Bluegrass Builders Ltd. Is using the percentage-of-completion method for a $ 2,010,000 contract that will take two years to complete. Data at December 31, 2020, the end of the first year, are
| Costs incurred to date............................................................ | $ 925,000 |
| Estimated total costs ............................. | 2,025,000 |
| Billings to date......................................................................... | 850,000 |
| Collections to date.................................................................. | 700,000 |
The gross profit or loss that should be recognized for 2020 is
In 2020, Pop Construction Corp. began work on a contract for $3,700,000. Other details follow:
|
2020 |
||
|
Costs incurred during the year |
$1,800,000 |
|
|
Estimated costs to complete as of December 31 |
1,200,000 |
|
|
Billings during the year |
1,650,000 |
|
|
Collections during the year |
975,000 |
Pop uses the percentage-of-completion method. For calendar 2020, Pop should report Revenue in 2020 of:
Haven Corp. contracted to construct a building for $ 750,000. Construction began in 2020 and was completed in 2021. Data relating to the contract follow:
| Year ended | ||
| December 31, | ||
| 2020 | 2021 | |
| Costs incurred...................................................................... | $ 300,000 | $ 230,000 |
| Estimated costs to complete............................................. | 200,000 | — |
Haven uses the percentage-of-completion method. For the calendar years 2020 and 2021, respectively, Haven should report revenue of
Blues Construction Corp. has consistently used the percentage-of-completion method. During 2020, Blues entered into a fixed-price contract to construct an office building for $6,000,000. Information relating to the contract is as follows:
|
At December 31 |
||||
|
2020 |
2021 |
|||
|
Percentage of completion (to date) |
15% |
45% |
||
|
Estimated total cost at completion |
$4,500,000 |
$4,800,000 |
||
|
Gross profit recognized (to date) |
225,000 |
540,000 |
Under the earnings approach, contract costs incurred during 2021 were
Manson Construction Corp. has consistently used the percentage-of-completion method. In 2020, Manson started work on a $ 10,500,000 construction contract that was completed in 2021. The following information was taken from Manson’s 2020 accounting records:
| Billings to date.................................................... | $ 3,300,000 |
| Costs incurred..................................................... | 3,150,000 |
| Collections to date............................................. | 2,100,000 |
| Estimated costs to complete............................ | 6,300,000 |
Under the earnings approach, what amount of gross profit should Manson recognize in 2020 on this contract?
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