→ required: Fill in the following two tables:Percent of completionYear202220232024Total revenuesTotal costGross profitAccount receivablebalanceZero profit methodYear202220232024Total revenuesTotal costGross profit Starks firm wanted to construct a new parking lot and storage area and for that reasonthey signed a 5 Million contract with Lannister company limited. The work began duringMarch 2022 and the project was completed by the end of 2024. You have the followingnotes related to each year:Year 1: at the end of 2022 the estimated total cost for the contract was 4,000,000 inwhich one quarter incurred by the end of 2022. The company billed the contractor with30%(70% of billed amount was collected during the year)Year 2: at the end of 2023 total estimated cost increased by 30 % from last yearestimations and the company's cost to date were 3 Million. The company billed thecontractor with 70% in both years (year 1 and year2) (70% of billed amount wascollectedduring year 1 and year 2)Year 3: the company finished the contract with total cost of 5.4 Million. The remainingof unbilled revenues was billed during the last year and only 5% remained uncollected.

Percentage of Completion Method In this Method, as the contractor recognises only up to the stage of…

→ required: Fill in the following two tables: Percent of completion Year 2022 2023 2024 Total revenues Total cost Gross profit Account receivable balance Zero profit method Year 2022 2023 2024 Total revenues Total cost

→ required: Fill in the following two tables: Percent of completion Year 2022 2023 2024 Total revenues Total cost Gross profit Account receivable balance Zero profit method Year 2022 2023 2024 Total revenues Total cost

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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Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $149 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Years 2023 2024 2025 Actual costs incurred in each year $ 42 million $ 69 million, $ 47 million Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project? Years 2023 2024 2025 Note: Enter "None" if there is no requirement of recognizing profit or loss. Loss amounts should be indicated with a minus sign. Enter your answers in millions (1.e., 10,000,000 should be entered as 10). Estimated remaining costs to complete the project (measured at December 31 of each year) $ 84 million $ 69 million $0 million Gross Profit (or Loss) recognized million million…
In 2024, Cupid Construction Company (CCC) began work on a two-year fixed price contract project. CCC recognizes revenue over time according to percentage of completion for this contract, and provides the following information (dollars in millions): Accounts receivable, 12/31/2024 (from construction progress billings) $ 37.5 Actual construction costs incurred in 2024 $ 135 Cash collected on project during 2024 $ 105 Construction in progress, 12/31/2024 $ 207 Estimated percentage of completion during 2024 60% What are CCC's estimated remaining construction costs on the project at the end of 2024?
Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $168 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff Years 2023 2024 2025 Actual costs incurred in each year $ 46 million $77 million $ 51 million Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project? Note: Enter "None" if there is no requirement of recognizing profit or loss. Loss amounts should be indicated with a minus sign. Enter your answers in millions (l.e., 10,000,000 should be entered as 10). Years 2023 None 2024 2025 Gross Profit (or Loss) recognized 0 million 32 million million Gross loss Gross profit $ Estimated remaining costs to complete the project (measured at December 31 of each year) $…
Swifty Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $598,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $894,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $263,120 $412,620 $607,000 Estimated costs to complete 334,880 185,380 –0– Progress billings to date 272,000 545,000 894,000 Cash collected to date 242,000 495,000 894,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $ Gross profit recognized in 2022 $ (b) Using the completed-contract method, compute the estimated…
On February 1, 2023, Magicfort Contractors agreed to construct a building at a contract price of $5,840,000. Magicfort estimated total construction costs would be $4,032,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: 2023 2024 2025 Total costs incurred to date Estimated costs to complete $1,512,000 2,520,000 $2,664,000 $4,620,000 1,776,000 -0- Customer billings to date 2,240,000 4,032,000 5,640,000 Collections to date 2,040,000 3,540,000 5,540,000 Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and cost-recovery accounting, show the gross profit that should be reported for 2023, 2024, and 2025. Percentage-of-Completion Gross Profit 2023 2023 Cost-Recovery Gross Profit 2024 $ 2025 $ SA 2024 2025 $
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Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $159 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Years 2023 2024 2025 Actual costs incurred in each year $ 43 million $ 71 million $ 48 million Years 2023 2024 2025 Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project? Note: Enter "None" if there is no requirement of recognizing profit or loss. Loss amounts should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Gross Profit (or Loss) recognized Gross profit Gross profit Gross profit Estimated remaining costs to complete t project (measured at December 31 of each year) $ 86 million. $ 71…
Build a Bridge Inc. prepares its financial statements in accordance with IFRS. The company started work on a contract in May 2023 to build a small bridge at a fixed price of $10,000,000. The bridge was to be completed by September 2025 at a total estimated cost of $8,000,000. Total cumulative costs incurred by the end of December 2023 and 2024 were $2,000,000 and $5,500,000, respectively. Because of cost overruns in 2024, it is now expected that the project will cost $800,000 more than originally estimated. Final costs at the end of the project totalled $9,000,000. Required Determine the amount of gross profit to be recognized for the years ending December 31, 2023 and 2024. First calculate the percent complete on December 31, 2023. The percent complete on December 31, 2023 is %.
On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington. D.C., for $340 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 Required: 2024 1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. 2025 $ 40 160 2. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2025 are $160 million instead of…
On June 15, 2024, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $430 million. The expected completion date is April 1, 2026, just in time for the 2026 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year Estimated costs to complete as of December 31 Required: 2024 Required 1 Required 2 Required 3 $ 40 210 1. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming Sanderson recognizes revenue over time according to percentage of completion. 2. Compute the revenue and gross profit that Sanderson will report in its 2024, 2025, and 2026 income statements related to this contract, assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2025…
ABC Construction Company began work on a contract in 2022 and completed the contract in 2023. The total contact price was P8,500,000. Information related to the construction project are as follows: 2022 2023 Costs incurred during the year P1,200,000 P6,250,000 Estimated costs to complete 4,800,000 - Progress billings during the year 1,450,000 7,050,000 Collections during the year 800,000 6,000,000 How much is the gross profit to be recognized in 2023?
On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: 2020 2021 2022 Total costs incurred during the year 4,500,000 5,300,000 4,000,000 Estimated costs to complete 7,500,000 4,200,000 1,800,000 Customer billings to date 6,600,000 12,000,000 13,800,000 Collections to date 6,000,000 10,500,000 13,500,000 Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. Using the cost-recovery method,…