ABC Construction Company began operations in 2020. Construction activity for the first year is shown below. All contracts are with different customers and any work remaining at December 31, 2020 is expected to be completed in 2021. ProjectContract Price BillingsCollectionsActual CostsAdditional cost to complete 15,600,0003,600,0003,400,0004,500,0001,125,00026,700,0002,200,0002,100,0001,260,0005,040,00035,200,0005,200,0004,935,1253,800,0000 The company uses the percentage of completion method in accounting for its projects. A. The amount of current asset/ liability reported for the projects in the year-end balance sheet is?B. The net profit or loss reported by ABC in its income statement for 2020 is?

Calculation of total costs and % completed: PROJECT ACTUAL COSTS (A) ADDITIONAL COST TO…

Answered: The amount of current asset/ liability…

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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ABC Construction Company began operations in 2020. Construction activity for the first year is shown below. All contracts are with different customers and any work remaining at December 31, 2020 is expected to be completed in 2021.

Project	Contract Price	Billings	Collections	Actual Costs	Additional cost to complete
1	5,600,000	3,600,000	3,400,000	4,500,000	1,125,000
2	6,700,000	2,200,000	2,100,000	1,260,000	5,040,000
3	5,200,000	5,200,000	4,935,125	3,800,000	0

The company uses the percentage of completion method in accounting for its projects.

A. The amount of current asset/ liability reported for the projects in the year-end balance sheet is?

B. The net profit or loss reported by ABC in its income statement for 2020 is?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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