On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price ofP50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA:201620172018Contract cost incurred during the19,200,00015,600,000 8,700,000yearEstimated cost at completion38,400,00043,500,000 43,500,000Billing during the year19,200,00021,000,000 10,200,000The entry to record the recognized profit in 2018 includes credit to Choices:CIP 1,380,000Contract cost 8,700,000Contract revenue 10,080,000CIP 50,400,000

Using percentage method, the gross profit is recognized on the basis of percentage of costs incurred…

On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of 50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2016 2017 2018 Contract cost incurred during the 19,200,000 15,600,000 8,700,000 vear Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000

On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of 50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2016 2017 2018 Contract cost incurred during the 19,200,000 15,600,000 8,700,000 vear Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000

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

Assume Avaya contracted to provide a customer with Internet infrastructure for $2,200,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: 2024 2025 Costs incurred during the year $ 316,000 $ 1,700,000 Estimated costs to complete as of 12/31 1,264,000 0 Billings during the year 400,000 1,660,000 Cash collections during the year 290,000 1,770,000 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time according to percentage of completion. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming this project does not qualify for revenue recognition over time.
SMDC Construction is constructing an office building under contract for Onyx Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of P1,550,000 each quarter. The total contract price is P18,600,000 and SMDC Construction estimates total costs of P17,750,000. SMDC Construction estimates that the building will take 3 years to complete, and commences construction on January 2, 2018. SMDC Construction completes the remaining 25% of the building construction on December 31, 2020, as scheduled. At that time the total costs of construction are P18,750,000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that SMDC Construction will recognize for the year ended December 31, 2020? Revenue Expenses A. P18,600,000 P18,750,000 B. P4,650,000 P 4,687,500 C. P4,650,000 P 5,250,000 D. P4,687,500 P 4,687,500 Group of answer choices D C B A
Use the percentage-completion method and show all calculations and explanation in detail.
Swifty Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $598,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $894,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $263,120 $412,620 $607,000 Estimated costs to complete 334,880 185,380 –0– Progress billings to date 272,000 545,000 894,000 Cash collected to date 242,000 495,000 894,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $ Gross profit recognized in 2022 $ (b) Using the completed-contract method, compute the estimated…
Star Construction Corporation has a contract to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 20×5. Actual costs were in line with estimated costs for 20×5 and 20×6. In 20×7, actual costs exceeded estimated costs by $150,000. Total construction costs incurred in each year were as follows: 20X5: $2,700,00020X6: $4,500,00020X7: $1,800,000 Progress billings based on the amount of work completed were collected each year. Star Construction uses the percentage-of-completion method. The percentage-of-completion is based on costs incurred compared with estimated total costs of the project. Company also billed the client and collected the following payments Year Billings Payments Received 20X5: $2,300,000 $2,100,000 20X6: $4,900,000 $4,700,000 20X7: $3,750,000 $4,150,000…
s
Answer is $1,800,000. Please explain the reasoning and calculations