On January 1, 2021, Turnstile Construction Company Inc. contracted to build a medical practice office building for Medicine Points Inc. for a total contract price of $2,000,000 On January 1, Turnstile estimated that it would take three years to complete the building. On December 31, 2023, the building was completed. Following are contract costs incurred, estimated costs to complete the contract, and accumulated billings to Medicine Points Inc. for 2021, 2022, and 2023 At 12/31/21 At 12/31/22 At 12/31/23 $540,000 $1,600,000 $2,200,000 500,000 -0. 300,000 1,400,000 2,000,000 Contract costs incurred to date Estimated costs to complete the contract 1,500,000 Billings to Medicine Inc. Required: Assuming this contract meets the requirements for recognizing revenue over time, prepare schedules to compute the profit or loss Turnstile Company would recognize as a result of this contract for the years ended December 31, 2021, 2022, and 2023.

On January 1, 2021, Turnstile Construction Company Inc. contracted to build a medical practice office building for Medicine Points Inc. for a total contract price of $2,000,000 On January 1, Turnstile estimated that it would take three years to complete the building. On December 31, 2023, the building was completed. Following are contract costs incurred, estimated costs to complete the contract, and accumulated billings to Medicine Points Inc. for 2021, 2022, and 2023 At 12/31/21 At 12/31/22 At 12/31/23 $540,000 $1,600,000 $2,200,000 500,000 -0. 300,000 1,400,000 2,000,000 Contract costs incurred to date Estimated costs to complete the contract 1,500,000 Billings to Medicine Inc. Required: Assuming this contract meets the requirements for recognizing revenue over time, prepare schedules to compute the profit or loss Turnstile Company would recognize as a result of this contract for the years ended December 31, 2021, 2022, and 2023.

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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In 2021, 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 2023. Information related to the contract is as follows: 2021 $2,542,000 .5.658000 2022 $3,772,000 2023 Cost incurred during the year Estimated costs to complete as of year-end $2,074,600
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: 2025 Cost incurred during the year. Estimated costs to complete as of year-end Billings during the year 2024 $ 2,059,000 5,041,000 2,190,000 $ 2,627,000 2,414,000 2,496,000 2026 $ 2,655,400 0 5,314,000 Cash collections during the year 1,895,000 2,400,000 5,705,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Revenue Gross profit (loss) 2024 2025 2026
In February 2020, Sheridan Construction signed a contract and commenced construction on a parking garage. The total contract price was $88.3 million and was expected to be completed in July 2024 at a total estimated cost of $81.0 million. Payment by the customer was to be made in several stages, based on significant events and dates throughout the construction timeline. The customer was to have control over the parking garage and was able to make major changes to the project during the construction process. Sheridan’s year-end was September 30.By the end of September, 2020, Sheridan had incurred $20,250,000 in costs and had invoiced $7,600,000 in progress billings. $7,100,000 of the progress billings had been collected.By September 30, 2021, Sheridan had incurred $39,000,000 in total costs and had invoiced $45,100,000 in progress billings, including the progress billings in 2020. Of the total billings, $30,900,000 in total had been collected. Also, Sheridan reviewed its cost estimates…