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Under the percentage-of-completion method, calculate the construction costs to be expensed in 2024. Construction cost expensed in 2024 1945800

Under the percentage-of-completion method, calculate the construction costs to be expensed in 2024. Construction cost expensed in 2024 1945800

FINANCIAL ACCOUNTING
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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* Your answer is incorrect. Under the percentage-of-completion method, calculate the construction costs to be expensed in 2024. Construction cost expensed in 2024 eTextbook and Media List of Accounts $ 1945800
Transcribed Image Text:* Your answer is incorrect. Under the percentage-of-completion method, calculate the construction costs to be expensed in 2024. Construction cost expensed in 2024 eTextbook and Media List of Accounts $ 1945800
Assume that Ivanhoe 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. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year Contract price Estimated total cost Estimated gross profit Estimated loss 2023 $1,035,000 3,105,000 955,000 788,000 *$2,980,800+$1.676,700 2024 $2,980,800 1,676,700 2,443,000 The revised estimates for the bridge contract are as follows. 1,801,000 2025 $4,657,500 1,202,000 2023 Original Estimates 2024 Revised Estimates $4,600,000 4,140,000 $460,000 2,011,000 0 $4,600,000 4,657.500* $(57,500)
Transcribed Image Text:Assume that Ivanhoe 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. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year Contract price Estimated total cost Estimated gross profit Estimated loss 2023 $1,035,000 3,105,000 955,000 788,000 *$2,980,800+$1.676,700 2024 $2,980,800 1,676,700 2,443,000 The revised estimates for the bridge contract are as follows. 1,801,000 2025 $4,657,500 1,202,000 2023 Original Estimates 2024 Revised Estimates $4,600,000 4,140,000 $460,000 2,011,000 0 $4,600,000 4,657.500* $(57,500)
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