On July 1, 2017, Cusak Construction Company Inc. contracted to build an office building for Candy Lane Corp. for a total contract price of $2,150,000. On July 1, Cusak estimated that it would take between two and three years to complete the building. In October 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Candy Lane in 2017, 2018, and 2019. 2017 340,000 1,360,000 590,000 2018 1,150,000 1,150,000 4,000,000 2019 2,400,000 Costs incurred to date (cumulative) Estimated costs to complete Billings to-Candy Lane 2,100,000 Required: Using the percentage of completion method, calculate the revenue and profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. The company used the cost-to-cost method to estimate the percentage complete.

On July 1, 2017, Cusak Construction Company Inc. contracted to build an office building for Candy Lane Corp. for a total contract price of $2,150,000. On July 1, Cusak estimated that it would take between two and three years to complete the building. In October 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Candy Lane in 2017, 2018, and 2019. 2017 340,000 1,360,000 590,000 2018 1,150,000 1,150,000 4,000,000 2019 2,400,000 Costs incurred to date (cumulative) Estimated costs to complete Billings to-Candy Lane 2,100,000 Required: Using the percentage of completion method, calculate the revenue and profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. The company used the cost-to-cost method to estimate the percentage complete.

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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