On July 1, 2025, Sunland Construction Company Inc. contracted to build an office building for Novak Corp. for a tota contract price of $1,920,000. On July 1, Sunland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Novak for 2025, 2026 and 2027. At 12/31/25 At 12/31/26 At 12/31/27 Contract costs incurred to date Estimated costs to complete the contract Billings to Novak $273,600 1,246,400 $1,171,600 $2,127,600 300,000 848,400 1,090,000 -0- 1,870,000 (a1) Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a result of this contract for the year ended December 31, 2025. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.) Costs to Date (12/31/25) Estimated Costs to Complete Estimated Total Costs Percent Complete 2025 $ $ %
On July 1, 2025, Sunland Construction Company Inc. contracted to build an office building for Novak Corp. for a tota contract price of $1,920,000. On July 1, Sunland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Novak for 2025, 2026 and 2027. At 12/31/25 At 12/31/26 At 12/31/27 Contract costs incurred to date Estimated costs to complete the contract Billings to Novak $273,600 1,246,400 $1,171,600 $2,127,600 300,000 848,400 1,090,000 -0- 1,870,000 (a1) Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a result of this contract for the year ended December 31, 2025. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.) Costs to Date (12/31/25) Estimated Costs to Complete Estimated Total Costs Percent Complete 2025 $ $ %
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 10C
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![On July 1, 2025, Sunland Construction Company Inc. contracted to build an office building for Novak Corp. for a total
contract price of $1,920,000. On July 1, Sunland estimated that it would take between 2 and 3 years to complete the
building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated
contract costs incurred, estimated costs to complete the contract, and accumulated billings to Novak for 2025, 2026,
and 2027.
At
12/31/25
At
12/31/26
At
12/31/27
Contract costs incurred to date
Estimated costs to complete the contract
Billings to Novak
$273,600
1,246,400
$1,171,600 $2,127,600
848,400
-0-
300,000
1,090,000
1,870,000
(a1)
Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a
result of this contract for the year ended December 31, 2025. (Ignore income taxes.) (If answer is 0, please
enter 0. Do not leave any fields blank.)
Costs to Date (12/31/25)
Estimated Costs to Complete
Estimated Total Costs
Percent Complete
Revenue Recognized
Costs Incurred
2025
Profit/(Loss) Recognized in 2025
A
$
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F34155495-98c3-48d8-afef-72febcd73805%2F72ed3d03-c265-4844-9b5a-a9abf3c2c40f%2Fhulf1etq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On July 1, 2025, Sunland Construction Company Inc. contracted to build an office building for Novak Corp. for a total
contract price of $1,920,000. On July 1, Sunland estimated that it would take between 2 and 3 years to complete the
building. On December 31, 2027, the building was deemed substantially completed. Following are accumulated
contract costs incurred, estimated costs to complete the contract, and accumulated billings to Novak for 2025, 2026,
and 2027.
At
12/31/25
At
12/31/26
At
12/31/27
Contract costs incurred to date
Estimated costs to complete the contract
Billings to Novak
$273,600
1,246,400
$1,171,600 $2,127,600
848,400
-0-
300,000
1,090,000
1,870,000
(a1)
Using the percentage-of-completion method, prepare a schedule to compute the profit or loss to be recognized as a
result of this contract for the year ended December 31, 2025. (Ignore income taxes.) (If answer is 0, please
enter 0. Do not leave any fields blank.)
Costs to Date (12/31/25)
Estimated Costs to Complete
Estimated Total Costs
Percent Complete
Revenue Recognized
Costs Incurred
2025
Profit/(Loss) Recognized in 2025
A
$
%
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