Sheridan Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.8 millionbeginning September 1, 2023, to build a road for a municipality. It has been estimated that the road construction will be complete byJune 2025. The following data pertain to the construction period.2023Costs to date$850,000Estimated costs to complete1,650,000Progress billings to date (non-refundable) 924,000Cash collected to date750,0002024$1,782,550532,4502,296,0002,157,0002025$2,346,00002,800,0002,800,000 Prepare a table comparing the gross profit recognized in each of the three years under (1) the percentage-of-completion method,(2) the zero-profit method, and (3) the completed-contract method. (Do not leave any answer field blank. Enter O for amounts.)2023 $2024(1)Percentage-of-Completion2025$tA$tata$(2)Zero-Profit$$tAta$(3)Completed-Contract

Percentage-of-Completion Method: Gross profit is recognized each year based on the percentage of the…

Prepare a table comparing the gross profit recognized in each of the three years under (1) the percentage-of-completion method, (2) the zero-profit method, and (3) the completed-contract method. (Do not leave any answer field blank. Enter O for amounts.) 2023 2024 2025 (1) Percentage-of-Completion $ $ $ tA LA $ LA $ LA (2) Zero-Profit $ $ LA $ LA (3) Completed-Contract

Prepare a table comparing the gross profit recognized in each of the three years under (1) the percentage-of-completion method, (2) the zero-profit method, and (3) the completed-contract method. (Do not leave any answer field blank. Enter O for amounts.) 2023 2024 2025 (1) Percentage-of-Completion $ $ $ tA LA $ LA $ LA (2) Zero-Profit $ $ LA $ LA (3) Completed-Contract

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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7
Garnet Corporation enters into a 4-year construction contract worth $100 million with Gold company on January 1, 2022. At the end of 2022, construction costs totaled $20 million and Garnet estimates $60 million of construction costs remain. If Garnet uses the percent of completion method to determine revenues, how much revenue will Garnet recognize in 2022 related to the construction contract?
Use the percentage-completion method and show all calculations and explanation in detail.
Suppose a company spends $100,000 on research and development in 2021. As a result of the products developed, additional revenue is generated over the next five years totaling $600,000. When is the cost of the research and development in 2021 recognized as an expense? Multiple Choice Evenly over the period 2022-2026. Full amount in 2026. Evenly over the period 2021-2025. Full amount in 2021.
Current Attempt in Progress Carla Vista Co. enters into a contract to sell Product A and Product B on January 2, 2023, for an upfront cash payment of $170,000. Product A will be delivered in two years (January 2, 2025) and Product B will be delivered in five years (January 2, 2028). Carla Vista allocates the $170,000 to Products A and B on a relative stand-alone selling price basis as follows. Stand-Alone Selling Prices Percentage Allocated Allocated Amounts Product A $36,000 20% $34,000 Product B 144,000 80% 136,000 $180,000 $170,000 Carla Vista uses an interest rate of 5%, which is its incremental borrowing rate.
- Oriole Construction Company began work on a $407,000 construction contract in 2025. During 2025, Oriole incurred costs of $272,000, billed its customer for $217,000, and collected $177,500. At December 31, 2025, the estimated additional costs to complete the project total $157,020. Prepare Oriole's journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the cost-recovery 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 O for the amounts. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries. Do not round Intermediate calculations.) No. Account Titles and Explanation (a) (b) eTextbook and Medial List of Accounts Debit Credit
Explain clearly
Assume that Cullumber Construction Company has a non-cancellable contract to construct a $4,600,000 bridge at an estimated cost of $4,140,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. Assume that progress billings are non-refundable. 2023 2024 2025 Costs to date (12/31) $1,076,400 $2,980,800 $4,657,500 Estimated costs to complete (12/31) 3,063,600 1,676,700 Progress billings during the year 957,000 2,422,000 1.221,000 Cash collected during the year 774,000 1,881,000 1,945,000 The revised estimates for the bridge contract are as follows. 2023 Original Estimates 2024 Revised Estimates Contract price $4,600,000 $4,600,000 Estimated total cost 4,140,000 4,657,500* Estimated gross profit $460,000 Estimated loss $(57,500) *$2,980,800+ $1,676,700 (a1) * Your answer is incorrect. Under the percentage-of-completion method, calculate the total loss in 2024. Total loss in 2024 $ LA 156400
Could you please recalculate the gross profit for 2025, 2026, and 2027? 2025 amount of 228,000 is incorrect. 2026 amount of 186,920 is incorrect. 2027 amount of 142,080 is incorrect. Thank you.