please help me solve all completely and correctly with working . I want to understand the solution . Answer in text please not image . On July 1, 2017, Headland Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,890,000. On July 1, Headland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2017, 2018, and 2019. At 12/31/17 At 12/31/18 At 12/31/19 Contract costs incurred to date $312,900 $1,148,400 $2,076,000 Estimated costs to complete the contract 1,177,100 831,600 –0– Billings to Gumbel 300,000 1,090,000 1,850,000 (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019

please help me solve all completely and correctly with working . I want to understand the solution . Answer in text please not image . On July 1, 2017, Headland Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,890,000. On July 1, Headland estimated that it would take between 2 and 3 years to complete the building. On December 31, 2019, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2017, 2018, and 2019. At 12/31/17 At 12/31/18 At 12/31/19 Contract costs incurred to date $312,900 $1,148,400 $2,076,000 Estimated costs to complete the contract 1,177,100 831,600 –0– Billings to Gumbel 300,000 1,090,000 1,850,000 (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 40P

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Starks firm wanted to construct a new parking lot and storage area and for that reason they signed a 5 Million contract with Lannister company limited. The work began during March 2022 and the project was completed by the end of 2024. You have the following notes related to each year: Year 1: at the end of 2022 the estimated total cost for the contract was 4,000,000 in which one quarter incurred by the end of 2022. The company billed the contractor with 30%(70% of billed amount was collected during the year) Year 2: at the end of 2023 total estimated cost increased by 30 % from last year estimations and the company's cost to date were 3 Million. The company billed the contractor with 70% in both years (year 1 and year2) (70% of billed amount was collectedduring year 1 and year 2) Year 3: the company finished the contract with total cost of 5.4 Million. The remaining of unbilled revenues was billed during the last year and only 5% remained uncollected.
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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…
On July 1, 2025, Wildhorse Construction Company Inc. contracted to build an office building for Indigo Corp. for a total contract price of $1,880,000. On July 1, Wildhorse 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 Indigo for 2025, 2026, and 2027. At 12/31/25 At 12/31/26 At 12/31/27 Contract costs incurred to date $286,900 $1,122,900 $2,066,700 Estimated costs to complete the contract 1,223,100 847,100 -0- Billings to Indigo 300,000 1,100,000 1,830,000 (a1) (a2) 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, 2026. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.) × Your answer is incorrect. > 2026…
In February 2020, Sandhill Construction signed a contract and commenced construction on a parking garage. The total contract price was $90.8 million and was expected to be completed in July 2024 at a total estimated cost of $83.0 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. Sandhill’s year-end was September 30.By the end of September, 2020, Sandhill had incurred $20,750,000 in costs and had invoiced $10,400,000 in progress billings. $7,600,000 of the progress billings had been collected.By September 30, 2021, Sandhill had incurred $40,200,000 in total costs and had invoiced $45,500,000 in progress billings, including the progress billings in 2020. Of the total billings, $30,500,000 in total had been collected. Also, Sandhill reviewed its cost estimates…
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…
On July 1, 2020, Torvill Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,900,000. On July 1, Torvill estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022. At 12/31/20 At 12/31/21 At 12/31/22 Contract costs incurred to date $ 300,000 $1,200,000 $2,100,000 Estimated costs to complete the contract 1,200,000 800,000 –0– Billings to Gumbel 300,000 1,100,000 1,850,000 Instructions a. Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) b. Using the…
On July 1, 2020, Oriole Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,880,000. On July 1, Oriole estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022. At12/31/20 At12/31/21 At12/31/22 Contract costs incurred to date $288,800 $1,227,600 $2,078,500 Estimated costs to complete the contract 1,231,200 752,400 –0– Billings to Gumbel 290,000 1,090,000 1,820,000 (a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any field blank.…
Pharoah, Inc. began work on a $6,909,000 contract in 2025 to construct an office building. During 2025, Pharoah, Inc. incurred costs of $1,791,800, billed its customers for $1,174,000, and collected $1,035,000. At December 31, 2025, the estimated additional costs to complete the project total $3,478,200. Prepare Pharoah's 2025 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Construction in Process Materials, Cash, Payables (To record costs incurred.) Accounts Receivable Billings on Construction in Process (To record billings.) cash Accounts Receivable (To record collections.) Construction in Process Construction Expenses Revenue from Long-Term…
On July 1, 2025, Torvill Construction Company Inc. contracted to build an office building for Gumbel Corp. On July 1, Torvill 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 Gumbel for 2025, 2026, and 2027. NOTE: The company's fiscal year aligns with the calendar year. The phrase "to date" that is used in the contract details below, as well as in the answer table, means up to the present time. Pay attention to the years that you're working with! Total contract price $ 2,400,000 Contract costs incurred to date $ Estimated costs to complete the contract Progress Billings to Gumbel during year At 12/31/25 300,000 1,200,000 300,000 1,100,000 At 12/31/26 At 12/31/27 $1,220,000 $2,150,000 800,000 800,000 Instructions a. b. Using the percentage-of-completion method, prepare…
Grein's Construction Company, entered into a fixed-price contract with Alexa Co. on July 1, 2024, to construct a four-story office building. At that time, Grein's estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,420,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2024 $366,000 3,294,000 727,000 Year 2024 2025 2026 At 12-31-2025 $ 2,814,000 1,876,000 2,310,000 Gross Profit (Loss) Recognized At 12-31-2026 $4,747,000 0 Assuming Grein's recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. If there is a loss, put the number in…

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	At 12/31/17	At 12/31/18	At 12/31/19
Contract costs incurred to date	$312,900	$1,148,400	$2,076,000
Estimated costs to complete the contract	1,177,100	831,600	–0–
Billings to Gumbel	300,000	1,090,000	1,850,000