Narayna Construction Corporation was contracted to build a new retail complex in a small town in northern Saskatchewan for $6,375,000. Construction activities are summarized below by year: Costs incurred during the year Estimated cost to complete Required: 1. Prepare the journal entries for revenue recognition for each year. 2. Calculate the gross margin for each year on the contract. 20X2 1,700,000 3,400,000 20X3 1,785,000 3,017,500 20X4 3,060,000 0

Narayna Construction Corporation was contracted to build a new retail complex in a small town in northern Saskatchewan for $6,375,000. Construction activities are summarized below by year: Costs incurred during the year Estimated cost to complete Required: 1. Prepare the journal entries for revenue recognition for each year. 2. Calculate the gross margin for each year on the contract. 20X2 1,700,000 3,400,000 20X3 1,785,000 3,017,500 20X4 3,060,000 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which The is estimated cost P31,200,000. company recognizes construction to Data on this project for 2022-2024 follow: Est'd Costs revenue over time. Contract Costs Billings 10,500,000 12,500,000 14,440,000 incurred to Complete 20,540,000 13,156,000 2022 5,460,000 9,984,000 2023 2024 15,756,000 The contract contains a penalty clause that penalizes the company a reduction of P70,000 from the contract price for every week of delay. contract was delayed for 8 weeks In 2024, the What is the gross profit for 2024? 1,164,000 1,466,400 1,724,000 1,824,000 А. с. в. D.
A quantity of steel in the amount of $423,000.0 is needed for a project, payment due (from contractor to steel fabricator) at the project begin date. The steel is expected to be erected in Month 2 and Month 3, with billing at the end of these months and subsequent payment from the owner (to the contractor) at the end of Month 3 and Month 4. Assume half the the payment occurs at the end of Month 3 and the other half at the end of Month 4. Using an annual interest rate of 18%, which is a monthly interest rate of 1.5%, to finance the purchase with a short-term line of credit loan, determine the total interest accumulated for this steel purchase until payment is received (from the owner).
Haft Construction Company has consistently applied the percentage-of-completion method. On January 10, 2014, Haft began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract: $ 300,000 Gross profit recognized at 12/31/14 Costs incurred 1/01/14 through 12/31/15 Estimated cost to complete at 12/31/15 1,800,000 600,000 In its income statement for the year ended December 31, 2015, what amount of gross profit should Haft report?
During 2007, Frank Corp. started a construction job with a total contract price of $2,800,000. It was completed on December 15, 2008. Additional data are as follows: 2007 2008 Actual costs incurred in current year $1,080,000 $1,220,000 Estimated remaining costs 1,080,000 — Billed to customer 960,000 1,840,000 Received from customer 800,000 1,920,000 Under the completed-contract method, what amount should Frank recognize as gross profit for 2008? Group of answer choices 500,000 $250,000 $180,000 $380,000
Please assits with this cost accounting question Contract Masters Ltd has entered into a contract with Creative Dealers Ltd. for the construction of a new branch office. The contract began on March 1, 2022 and was completed on December 28 2022. The total value of the contract was $12,000,000. On December 30, 2022, an engineer inspected the project and issued a final certificate for work done. The following information is available with regards to the contract: $Site labour costs 3,120,000 Materials direct to site 2,000,000Materials returned 30,500 Materials from store and workshops 500,000 Maintenance of plant and use 980,000 Direct expenses 1,090,000 General overheads 750,000 Materials…
During its first year of operations, Corvallis Company incurred the following costs: direct materials - $15,000$15,000; production workers wages - $25,000$25,000; sales commission - $12,000$12,000; advertising - $2,500$2,500; rent on the manufacturing plant - $11,000$11,000; depreciation of plant equipment - $9,000$9,000. The company produced 12,00012,000 units and of these sold 8,0008,000. What is the average production cost per unit?
Bridgenorth has undertaken a $5 million contract to repair a railway tunnel. The contract was signed on 1 April 20X8 and the work is expected to take two years. This is a contract where performance obligations are satisfied over time and progress in satisfying performance obligations is to be measured according to % of work completed as certified by a surveyor. Bridgenorth has an enforceable right to payment for performance completed to date. At 31 December 20X9 the details of the contract were as follows: 20X9 20X8 $ $ Total contract value 5,000,000 5,000,000 Costs to date 3,600,000 2,300,000 Estimated costs to completion 700,000 2,100,000 Work invoiced to date 3,000,000 2,000,000 Cash received to date 2,400,000 1,500,000 % certified complete 75% 40% What is the profit recognised for the year ended 31 December 20X8?
A Company is trying to decide which one of two contracts it will accept. The costs and revenues associated with each are listed below: Contract revenue Materials Contract X Contract Z $ 260,000 $ 200,000 10,000 10,000 Labor costs 88,000 120,000 Depreciation on 8,000 10,000 equipment Cost incurred for 1,500 1,500 consulting advice Allocated portion of overhead 5,000 3,000 The equipment was purchased last year and has no resale value. Which of these amounts is relevant for the selection of one contract over another? OA. Contract revenue and labor costs OB. Materials, consulting advice, and allocated overhead OC. Cost of consulting advice and allocated overhead OD. Contract revenue, labor costs, depreciation on equipment and allocated portion of overhead OE. None of the above
Journalize the ff transactions
PLEASE ANSWER THE NO. 4 QUESTION