4. In 2016, Omega Construction began work on a contract with a price of $850,000 andestimated costs of $595,000. Data for each year of the contract are as follows:Costs incurred during the year $238,000Estimated costs to completePartial billingsCollections201620172018$319,600$105,000357,000139,400-0-260,000210,000380,000240,000200,000410,000Assuming the performance obligation is satisfied over time, what would be the gross profit in2016?a. $102,000b. $260,000c. $255,000d. $425,000

Introduction:-Gross profit is the profit a company generates after subtracting the expenses of…

Answered: uring the year $238,000 to complete…

Business

Accounting

uring the year $238,000 to complete 357,000 260,000 2016 $319,600 139,400 210,000 2017 $105,000 -0- 380,000 2018

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

In 2016, Omega Construction began work on a contract with a price of $850,000 and estimated costs of $595,000. Data for each year of the contract are as follows: 2016 2017 2018 Costs incurred during the year $238,000 $319,600 $105,000 Estimated costs to complete 357,000 139,400 -0- Partial billings 260,000 210,000 380,000 Collections 240,000 200,000 410,000 Refer to Exhibit 17-2. Assuming the performance obligation is satisfied over time, what would be the gross profit in 2016? $255,000 $260,000 $102,000 $425,000
On July 1, 2016, ABC Construction Corp. contracted to build an office building for XYZ, Inc. fora total price of P975,000. 2016 2017 2018Contract cost incurred to date 75,000 600,000 1,050,000Estimated costs to complete the contract 675,000 400,000 -Billings to XYZ, Inc. 150,000 550,000 275,0001. Under the percentage of completion method, how much is the Construction-in-Progressat December 31,2017?2. Under the zero-profit method, how much is the Construction-in-Progress, net of ProgressBillings at December 31, 2017?3. Under the percentage of completion method, how much is the realized gross profit/ (loss)at December 31, 2018?
Answer is $600,000. Please explain the reasoning and calculations
Deen Construction began a construction project in 2018. The contract price was $1,250,000, and theestimated costs were $1,000,000. Data for each year of the contract are as follows:2018 2019 2020Costs incurred during the year $250,000 $600,000 $190,000Estimated costs to complete 750,000 212,500 -0-Partial billings 375,000 500,000 375,000Collections 187,500 469,000 593,500Instructions:1. Assuming Deen the percentage of completion method:(a) Prepare a schedule that computes the gross profit for 2018 - 2020(b) Determine the net amount for construction in progress inventory should be reported on the2018 balance sheet.(c) Prepare all the necessary journal entries for 20192. Compute the amount of gross profit to be recognized each year, assuming the completed contractmethod is used.
Blue construction Co. has two projects for which it reported, as of December 31, 2012, the following information: Project a Project b Contract price P4, 800, 000 P860,000 2011: cost incurred 3, 400, 000 Percentage completed 75% 2012: cost incurred P1, 250, 000 P140, 000 Percentage completed 25% 15%Using the percentage of completion method of revenue recognition, gross profit on project A to be presented in 2011 would be:P 200, 000 P300, 000 P400, 000 P900, 00How much is the construction in progress on December 31,2011 from project A?200,0003,600,0003,400,0004,800,000
Puff and Stuff Construction began a construction project in 2016. The contract price was $1,300,000 and estimated costs were $1,100,000. Data for each year follow: 2016 2017 2018 Costs incurred during the year $ 250,000 $ 600,000 $ 210,000 Estimated costs to complete $ 850,000 $ 230,000 $ - Partial billings $ 400,000 $ 600,000 $ 300,000 Collections $ 385,000 $ 610,000 $ 305,000 Required: Assuming Puff satisfies its performance obligation over time, determine: 1. The balance of Construction in Progress at the end of 2016. 2. How the net amount for construction in progress inventory should be reported on the 2017 balance sheet. 3. The gross profit for 2018.
During 2009, Mason Construction, Inc. started work on a P 5,200,000 fixed-price construction contract to be completed in two years. The accounting records disclosed the following data for the year ended December 31, 2009: Cost incurred P 2,650,000Estimated cost to complete 2,720,000Progress billings 2,500,000Collections 2,000,000What amount of net income or loss should have been recognized in 2009? *
SMDC Construction signed a contract to build a building over a period 3 years for a price of P10,000,000. Information relating to the performance of the contract is summarized as follows: 2017 2018 2019 contribution costs incurred during the year 2,500,000 2,400,000 1,800,000 estimated costs to complete 4,500,000 1,800,000 - buildings during the year 2,200,000 2,800,000 5,000,000 collections during the year 2,000,000 2,500,000 5,500,000 Prepare the entries under the percentage of completion.
During 2016, Green Love Company started a construction work with a contract price of $4,500,000,000. The work was completed in 2018. The following information is available on picture below. (a) Compute the application of the percentage of completion method on a cost to cost basis. (b) Calculate the amount of revenue and gross profit to be recognized annually using the percentage of completion and cost-recovery methods.
Tigasin Builders Company began its construction activities in 2017. At the end of its first year's operation, the following projects (and other relevant information) are still uncompleted: Collections thru 12/31 Project Contract Actual costs Est cost to Billings thru 12/31 Price thru 12/31 Complete, 12/31 Angeles City 15,000,000 Palo City 10,000,000 5,500,000 9,000,000 5,250,000 12,400,000 3,390,000 3,100,000 13,560,000 17,500,000 Tigasin Builders will use the cost-to-cost percentage of completion in accounting for the Angeles City project, while the cost recovery method will be used for the Palo City project. 1. Compute the Construction Revenue to be recognized by Tigasin Builders for the Angeles City project in 2017. 2. Determine how (1) the Angeles City Project and (2) the Palo City Project will be shown on the year-end balance sheet.
On February 1, 2023, Sandhill Contractors agreed to construct a building at a contract price of $3,460,000. The total estimated construction costs would be $1,890,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: Total costs incurred to date Estimated costs to complete Customer billings to date Collections to date 2023 Gross profit/ (loss) 689,850 1,200,150 1,100,000 1,000,000 2023 2024 573050 $1,162,000 $ 2,365,000 913,000 1,890,000 1,750,000 2025 Calculate the gross profit / (loss) that should be recognized for 2023, 2024, and 2025 using the percentage completion method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round percentage complete to 1 decimal place, e.g. 15.2% and final answers to O decimal places, e.g. 5,125.) 2024 -0- 3,460,000 2,950,000 -107450 $ LA 2025 40450
PAPASA Co. has consistently used the percentage of completion to account for its construction projects. On January 31, 2017, the company began work on a P4,500,000 construction contract. At the inception date, the estimated cost of the construction was P3,375,000. The following relates to the project Gross profit – 2017 450,000 Cost incurred to date – 2018 2,700,000 Estimated cost to complete – 2018 900,000 Progress billings 2018 3,500,000 How much is the Gross Profit/Loss Realized in 2018? Kindly show your good accounting form for the solution. Thank you!