McCombs Contractors received a contract to construct a mental health facility for $2,500,000. Construction was begun in 2023 and completed in 2024. Cost and other data are presented below 2023 Costs incurred during the year Estimated costs to complete Billings during the year Cash collections during the year $ 1,500,000 1,200,000 2024 $ 1,300,000 0 1,200,000 1,000,000 1,300,000 1,500,000 Assume that McCombs recognizes revenue on this contract over time according to percentage of completion. Required: Compute the amount of gross profit recognized during 2023 and 2024, Note: Loss amounts should be indicated with a minus sign. Amount of gross profit (or loss) recognized in 2023 Amount of gross profit (or loss) recognized in 2024

McCombs Contractors received a contract to construct a mental health facility for $2,500,000. Construction was begun in 2023 and completed in 2024. Cost and other data are presented below 2023 Costs incurred during the year Estimated costs to complete Billings during the year Cash collections during the year $ 1,500,000 1,200,000 2024 $ 1,300,000 0 1,200,000 1,000,000 1,300,000 1,500,000 Assume that McCombs recognizes revenue on this contract over time according to percentage of completion. Required: Compute the amount of gross profit recognized during 2023 and 2024, Note: Loss amounts should be indicated with a minus sign. Amount of gross profit (or loss) recognized in 2023 Amount of gross profit (or loss) recognized in 2024

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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McCombs Contractors received a contract to construct a mental health facility for $1,800,000. Construction was begun in 2017 and completed in 2018. Cost and other data are presented below: 2017 2018 Costs incurred during the year $ 450,000 $1,100,000 Estimated costs to complete 1,050,000 0 Billings during the year 400,000 1,400,000 Cash collections during the year 300,000 1,500,000 Assume that McCombs recognizes revenue on this contract over time according to percentage of completion. Compute the percent completed for 2017 and 2018 Now compute the percent completed: 2017 2018 Costs to date/total estimated costs = Gross profit Total Gross Profit Previously recognized Gross profit recognized in current year
McCombs Contractors received a contract to construct a mental health facility for $1,800,000. Construction was begun in 2017 and completed in 2018. Cost and other data are presented below: 2017 2018 Costs incurred during the year $ 450,000 $1,100,000 Estimated costs to complete 1,050,000 0 Billings during the year 400,000 1,400,000 Cash collections during the year 300,000 1,500,000 Assume that McCombs recognizes revenue on this contract over time according to percentage of completion. Compute the amount of gross profit recognized during 2017 and 2018. 2017 2018 Contract price Actual costs to date Estimated costs to complete Total estimated costs Total Gross profit recognized
In 2024, 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 2026. Information related to the contract is as follows: Problem 6-10 (Algo) Part 4 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. Costs incurred during the year Estimated costs to complete as of year-end Revenue Gross profit (loss) S 4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following costs incurred and costs to complete information. 2024 Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign. Answer is not complete. 2024 $ 2,184,000 5,616,000 2,120,000 1,860,000 2,800,000 2025 2025 $ 3,510,000…
Sheridan Construction Co. contracted to build a bridge for $10,500,000. Construction began in 2024 and was completed in 2025. Data relating to the construction are: Costs incurred during the year Estimated costs to complete (a) 2024 $4,095,000 Revenue $ 2,730,000 Sheridan uses the percentage-of-completion method. How much revenue should be reported for 2024? 2025 $2,780,000
Record the construction costs, progress billings, cash collections and gross profit (loss) for 2024, 2025 and 2026.
of 5 Book rint rences In 2024, 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 2026. 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. Costs incurred during the year Estimated costs to complete as of year-end Revenue Gross profit (loss) $ $ 2024 4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following costs incurred and costs to complete information. Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign. 3,000,000 600,000 2024 $ 2,400,000 5,600,000 2,000,000 1,800,000 2025 2024 $ 2,400,000 5,600,000 2026 2025 $…
Sandhill Construction, which follows ASPE entered into a contract to construct a bridge for a contract price of $2.8 million. Construction began in 2022 and was completed in 2024. Below are the details of the transactions related to the contract: Costs incurred during the year Estimated costs to complete Revenue Expenses $ Gross Profit $ 2022 2022 $637,000 1,489,000 $844,000 Calculate the gross profit to be recognized each year using the completed-contract method. 2023 $ $ 713,000 2024 $715,900 2023 0 $ $ 2024 SUPPORT
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In 2018, 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 2020. Information related to the contract is as follows: Cost incurred during the year $ 2,016,000 $ 2,808,000 $ 2,613,600 Estimated costs to complete as of year-end 5,184,000 2,376,000 0 Billings during the year 2,180,000 2,644,000 5,176,000 Cash collections during the year 1,890,000 2,500,000 5,610,000 Westgate recognizes revenue over time according to percentage of completion. 4. Compute the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) Cost incurred during the year $ 2,016,000 $ 3,890,000 $ 3,290,000…
es In 2024, 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 2026. Information related to the contract is as follows: 2024 $ 3,471,000 5,429,000 2,900,000 2,700,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Cost incurred during the year Estimated costs to complete as of year-end 2025 $ 4,005,000 1,424,000 4,576,000 4,500,000 Cost incurred during the year Estimated costs to complete as of year-end Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2024 $ 2,490,000 5,690,000 2-b.…
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara Countyfor $10,000,000. The road was completed in 2020. Information related to the contract is as follows:2018 2019 2020Cost incurred during the year $2,400,000 $3,600,000 $2,200,000Estimated costs to complete as of year-end 5,600,000 2,000,000 –0–Billings during the year 2,000,000 4,000,000 4,000,000Cash collections during the year 1,800,000 3,600,000 4,600,000Westgate recognizes revenue over time according to percentage of completion.Required:1. Calculate the amount of revenue and gross profit to be recognized in each of the three years.2. Prepare all necessary journal entries for each of the years (credit “various accounts” for construction costsincurred).3. Prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract. Indicate whetherany of the amounts shown are contract assets or contract liabilities.4. Calculate the amount of revenue and gross…
In 2024, 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 2026. Information related to the contract is as follows: 2024 $ 3,096,000 5,504,000 2,600,000 2,400,000 2025 Cost incurred during the year Estimated costs to complete as of year-end $ 3,870,000 1,634,000 4,366,000 Billings during the year 3,034,000 Cash collections during the year 4,200,000 3,400,000 Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2026 $ 1,797,400 0