The main business of Santolina Co is building work. At the end of September 20X3 there is anuncompleted contract on the books, details of which are as follows.1.4.X1Date commenced23.12.X3Expected completion date290,000210,450230,000Total contract revenueCosts to 30.9.X3Value of performance obligations satisfied to 30.9.X3Amounts invoiced for work certified to 30.9.X3Cash received to 30.9.X3Estimated costs to completion at 30.9.X3210,000194,00020,600Santolina Co calculates satisfaction of performance obligations based on work certified as a percentage ofcontract price.RequiredPrepare calculations showing the amount to be included in the statement of profit or loss and statement offinancial position at 30 September 20X3 in respect of the above contract.

Profit and loss (P&L) statement are those financial statements which summarizes the incurred…

The main business of Santolina Co is building work. At the end of September 20X3 there is an uncompleted contract on the books, details of which are as follows. Date commenced Expected completion date 1.4.X1 23.12.X3 $ 290,000 210,450 ptal contract revenue osts to 30.9.X3 lue of performance obligations satisfied to 30.9.X3 nounts invoiced for work certified to 30.9.X3 sh received to 30.9.X3 mated costs to completion at 30.9.X3 230,000 210,000 194,000 20,600

The main business of Santolina Co is building work. At the end of September 20X3 there is an uncompleted contract on the books, details of which are as follows. Date commenced Expected completion date 1.4.X1 23.12.X3 $ 290,000 210,450 ptal contract revenue osts to 30.9.X3 lue of performance obligations satisfied to 30.9.X3 nounts invoiced for work certified to 30.9.X3 sh received to 30.9.X3 mated costs to completion at 30.9.X3 230,000 210,000 194,000 20,600

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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Bella Construction Co. uses the percentage-of-completion method. In 20x1, Bella began work on a contract for $2,477,005; it was completed in 20x2. The following cost data pertain to this contract: Year ended December 31, 20x1 Year ended December 31, 20x2 Costs incurred during the year $869,041 $559,369 Estimated costs to complete at the of year $494,825 - The amount of gross profit to be recognized on the income statement for the year ended December 31, 20x2 is: a. $553,770 b. $339,315 c. $1,048,595 d. $1,113,139
During 2007, Frank Corp. started a construction job with a total contract price of $2,800,000. It was completed on December 15, 2008. Additional data are as follows: 2007 2008 Actual costs incurred in current year $1,080,000 $1,220,000 Estimated remaining costs 1,080,000 — Billed to customer 960,000 1,840,000 Received from customer 800,000 1,920,000 Under the completed-contract method, what amount should Frank recognize as gross profit for 2008? Group of answer choices 500,000 $250,000 $180,000 $380,000