Version 3: (overall loss) On February 1, 2016, Fair Contractors agreed to construct a building at a contract price of $2,200,000. Information relating to the costs for this contract is as follows: Total costs incurred to date Estimated costs to complete 2016 $ 750.000 1,250,000 2017 $1.320.000 980,000 2018 $2,350,000 -0- Required: a. Calculate the revenue to be recognized in 2016, 2017 and 2018. Show your calculations. b. Prepare a partial Income Statement for 2016, 2017 and 2018 calculating gross profit (loss). c. Prepare the adjusting year end journal entry in 2017, the year the loss was projected.

Version 3: (overall loss) On February 1, 2016, Fair Contractors agreed to construct a building at a contract price of $2,200,000. Information relating to the costs for this contract is as follows: Total costs incurred to date Estimated costs to complete 2016 $ 750.000 1,250,000 2017 $1.320.000 980,000 2018 $2,350,000 -0- Required: a. Calculate the revenue to be recognized in 2016, 2017 and 2018. Show your calculations. b. Prepare a partial Income Statement for 2016, 2017 and 2018 calculating gross profit (loss). c. Prepare the adjusting year end journal entry in 2017, the year the loss was projected.

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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