Pharoah Construction Company uses the percentage-of-completion method of accounting. In 2025, Pharoah began work under acontract with a contract price of $1,650,000. Other details follow:Costs incurred during the yearEstimated costs to complete, as of December 31Billings during the yearCollections during the year(a)Your answer is incorrect.2025$1,093,400446,600933,400260,0002026$1,510,000-0-1,650,0001,650,000What portion of the total contract price would be recognized as revenue in 2025? In 2026?

2025: $1,172,1602026: $ 477,840 Explanation:For 2025:Total costs incurred = $1,093,400Total…

Answered: Pharoah Construction Company uses the…

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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On January 1, 2020, Miller Construction Company contracted to build a parking lot for the city of St. Louis for $825,000. The following transactions and estimates relate to this contract. Construction costs incurred during 2020 $440,000 $209,000 $192,500 $440,000 Progress billings Cash collections Estimated costs to complete a. Prepare the 2020 journal entry to record profit or loss assuming revenue is recognized over time. Note: Record any multiple debits in alphabetical order and any multiple credits in alphabetical order. a. Account b. To recognize revenues and expenses Account + # + b. Prepare the 2020 journal entry to record profit or loss assuming revenue is recognized at a point in time. Note: If a journal entry (or a line of the journal entry) isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). To recognize revenues and expenses Debit + + Credit Debit Credit
Crane Construction Co. uses the percentage-of-completion method. In 2021, Crane began work on a contract for $24475000; it was completed in 2022. The following cost data pertain to this contract: Year Ended December 31 2021 2022 Cost incurred during the year $8350000 $6150000 Estimated costs to complete at the end of year 5739000 If the completed-contract method of accounting was used, the amount of gross profit to be recognized for years 2021 and 2022 would be 2021 2022 $9975000. $(411000). $0. $10386000. $10386000. $0. $0. $9975000. O O
A company uses the percentage-of-completion method of accounting. In 2020, the company began work a project, which had a contract price of $23,700. Other details follow: 2020 2021 Costs incurred to date $6,000 $18,000 Estimated costs to complete, as of December 31 14,000 -0- Billings to date 11,350 17,460 Collections to date 9,390 16,260 At the end of 2020, what is the inventory/current liability related to the construction of this project? (Very important: if the company reports a current liability, then put a minus sign in front of the amount. If the company reports an inventory, then no plus or minus sign is needed.) (Do not round your answers in any part of the computation.)
During 2025, Oriole Company started a construction job with a contract price of $1,590,000. The job was completed in 2027. The following information is available. Costs incurred to date Estimated costs to complete Billings to date Collections to date (a) 2025 $396,000 $806,600 594,000 301,000 268,000 2026 Gross profit recognized in 2025 $ Gross profit recognized in 2026 $ 283,400 892,000 816,000 2027 $1,080,000 -0- 1,590,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. 1,427,000
Sheridan Construction Co. contracted to build a bridge for $10,500,000. Construction began in 2024 and was completed in 2025. Data relating to the construction are: Costs incurred during the year Estimated costs to complete (a) 2024 $4,095,000 Revenue $ 2,730,000 Sheridan uses the percentage-of-completion method. How much revenue should be reported for 2024? 2025 $2,780,000
Kingbird Construction Company began work on a $418,500 construction contract in 2020. During 2020, Kingbird incurred costs of $285,500, billed its customer for $233,000, and collected $172,000. At December 31, 2020, the estimated additional costs to complete the project total $155,765.Prepare Kingbird’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) No. Account Titles and Explanation Debit Credit (a) enter an account title to record the transaction using the percentage-of-completion method enter a debit amount enter a credit amount enter an account title to record the transaction using the percentage-of-completion method enter a debit…
1. During 2020, Bay Construction started a new construction job with a contract price of $750 million. Bay has a 12/31 fiscal year end. Bay has determined that the contract does not qualify for revenue recognition over time. The contract was completed on 12/31/22 with the following information ($ in millions): Costs incurred in the period (paid in cash) Estimated costs to complete at 12/31 Billings on contract in the period Cash collected in the period 2020 180.0 2021 2022 432.0 150.0 540.0 153.0 -0- 150 350 250 200 400 150 What is the amount of gross profit (loss) on the contract that Bay would recognize on the Income Statement in 2020, 2021 and 2022? You must show supporting work (calculations/explanations) to receive credit for your answers. Gross Profit (Loss) 2020 2021 2022

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