Homework Help is Here – Start Your Trial Now!
Business
Accounting
The board of directors of Oriole Construction Company is meeting to choose between the cost-recovery method and the percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Oriole's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Oriole commenced doing business on January 1, 2024. 2. Construction activities for the year ended December 31, 2024, were as follows: Contract Costs Estimated Additional Costs Incurred Total Contract Billings Through Cash Collections to Through Through Complete 12/31/24 Project Price 12/31/24 12/31/24 Contract A $494,000 $334,000 $304,000 $418,000 $95,000 B 714,000 204,000 204,000 186,000 434,000 C 472,000 469,000 384,000 344,000 -0- D 187,000 94,000 62,000 117,000 91,000 E 444,000 394,000 394,000 314,000 78,500 $2,311,000 $1,495,000 $1,348,000 $1,379,000 $698,500 3. Each contract is with a different customer. 4. Any work remaining to be done on the contracts is expected to be completed in 2025. (a) * Your answer is incorrect. Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). $ 98000 167400

The board of directors of Oriole Construction Company is meeting to choose between the cost-recovery method and the percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Oriole's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Oriole commenced doing business on January 1, 2024. 2. Construction activities for the year ended December 31, 2024, were as follows: Contract Costs Estimated Additional Costs Incurred Total Contract Billings Through Cash Collections to Through Through Complete 12/31/24 Project Price 12/31/24 12/31/24 Contract A $494,000 $334,000 $304,000 $418,000 $95,000 B 714,000 204,000 204,000 186,000 434,000 C 472,000 469,000 384,000 344,000 -0- D 187,000 94,000 62,000 117,000 91,000 E 444,000 394,000 394,000 314,000 78,500 $2,311,000 $1,495,000 $1,348,000 $1,379,000 $698,500 3. Each contract is with a different customer. 4. Any work remaining to be done on the contracts is expected to be completed in 2025. (a) * Your answer is incorrect. Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). $ 98000 167400

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 25E: Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and...
See similar textbooks
icon
Related questions
Question
The board of directors of Oriole Construction Company is meeting to choose between the cost-recovery method and the percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Oriole's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Oriole commenced doing business on January 1, 2024. 2. Construction activities for the year ended December 31, 2024, were as follows: Contract Costs Estimated Additional Costs Incurred Total Contract Billings Through Cash Collections to Through Through Complete 12/31/24 Project Price 12/31/24 12/31/24 Contract A $494,000 $334,000 $304,000 $418,000 $95,000 B 714,000 204,000 204,000 186,000 434,000 C 472,000 469,000 384,000 344,000 -0- D 187,000 94,000 62,000 117,000 91,000 E 444,000 394,000 394,000 314,000 78,500 $2,311,000 $1,495,000 $1,348,000 $1,379,000 $698,500 3. Each contract is with a different customer. 4. Any work remaining to be done on the contracts is expected to be completed in 2025. (a) * Your answer is incorrect. Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). $ 98000 167400
Transcribed Image Text:The board of directors of Oriole Construction Company is meeting to choose between the cost-recovery method and the percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Oriole's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information: 1. Oriole commenced doing business on January 1, 2024. 2. Construction activities for the year ended December 31, 2024, were as follows: Contract Costs Estimated Additional Costs Incurred Total Contract Billings Through Cash Collections to Through Through Complete 12/31/24 Project Price 12/31/24 12/31/24 Contract A $494,000 $334,000 $304,000 $418,000 $95,000 B 714,000 204,000 204,000 186,000 434,000 C 472,000 469,000 384,000 344,000 -0- D 187,000 94,000 62,000 117,000 91,000 E 444,000 394,000 394,000 314,000 78,500 $2,311,000 $1,495,000 $1,348,000 $1,379,000 $698,500 3. Each contract is with a different customer. 4. Any work remaining to be done on the contracts is expected to be completed in 2025. (a) * Your answer is incorrect. Compute the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2024, which would be reported under: (1) The cost-recovery method. (2) The percentage-of-completion method (based on estimated costs). $ 98000 167400
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SEE MORE TEXTBOOKS