Provide solution Windsor Construction Company uses thepercentage-of-completion method of accounting. In2014, Windsor began work on a contract it hadreceived which provided for a contract price of$3,000,000. Other details follow for 2014:Costs incurred during the year $1,400,000Estimated costs to complete as of December 312014, $600,000Billings during the year $1,000,000Collections during the year $900,000What should be the gross profit recognized in2014?- $700,000- $1,000,000- $1,400,000- $2,100,000

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Answered: Windsor Construction Company uses the…

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 26E

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Archer Construction Company began work on a $420,000 construction contract in 2017. During 2017, Archer incurred costs of $278,000, billed its customer for $215,000, and collected $175,000. At December 31, 2017, the estimated additional costs to complete the project total $162,000. Prepare Archer’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method.
Sheridan Construction Co. uses the percentage-of-completion method. In 2024, Sheridan began work on a contract for $21300000; it was completed in 2025. The following cost data pertain to this contract: Cost incurred during the year Estimated costs to complete at the end of year Year Ended December 31 $8516000. $2990000. $3680000. $3684000. 2024 $7254000 4836000 2025 $5530000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 is
Crane Construction Co. uses the percentage-of-completion method. In 2021, Crane began work on a contract for $24475000; it was completed in 2022. The following cost data pertain to this contract: Year Ended December 31 2021 2022 Cost incurred during the year $8350000 $6150000 Estimated costs to complete at the end of year 5739000 If the completed-contract method of accounting was used, the amount of gross profit to be recognized for years 2021 and 2022 would be 2021 2022 $9975000. $(411000). $0. $10386000. $10386000. $0. $0. $9975000. O O
Blue Construction Company began work on a $979,000 construction contract in 2017. During 2017, Blue incurred costs of $402,000, billed its customer for $318,000, and collected $238,000. At December 31, 2017, the estimated future costs to complete the project total $630,000. Prepare Archer's journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. Round percent value to 2 decimal places, eg. 52.75 and final answers to O decimal places, eg.5,275) Account Titles and Explanation Debit Credit (a) (b)
Haft Construction Company has consistently applied the percentage-of-completion method. On January 10, 2014, Haft began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract: $ 300,000 Gross profit recognized at 12/31/14 Costs incurred 1/01/14 through 12/31/15 Estimated cost to complete at 12/31/15 1,800,000 600,000 In its income statement for the year ended December 31, 2015, what amount of gross profit should Haft report?
Cullumber Construction Co. uses the percentage-of-completion method. In 2024, Cullumber began work on a contract for $23200000; it was completed in 2025. The following cost data pertain to this contract: Year Ended December 31 2024 2025 Cost incurred during the year $8736000 $5720000 Estimated costs to complete at the end of year 5824000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 is ○ $3456000. ○ $8744000. $2920000. $3560000.
9
Oriole Construction Company began work on a $420,000 construction contract in 2025. During 2025, Oriole incurred costs of $264, 500, billed its customber for $207,000, and collected $179,500. December 31, 2025, the estimated additional costs to complete the project total $159, 650. Prepare Oriole's journal entry to record profit or loss, if any, using (a) the percentage - of - completion method and (b) the cost-recovery method.
(Recognition of Revenue on Long-Term Contract and Entries) Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2017, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details follow: 2017 2018 Costs incurred during the year $640,000 $1,425,000 Estimated costs to complete, as of December 31 960,000 –0– Billings during the year 420,000 1,680,000 Collections during the year 350,000 1,500,000 Instructions(a) What portion of the total contract price would be recognized as revenue in 2017? In 2018?(b) Assuming the same facts as those above except that Hamilton uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2018?(c) Prepare a complete set of journal entries for 2017 (using the percentage-of-completion method).
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.
Shepard Construction Company has consistently used the percentage-of-completion method. On January 10, 2008, Shepard began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract: Income recognized on December 31, 2008 P 300,000Cost incurred, January 10, 2008 through December 31, 2009 1,800,000Estimated cost to complete at December 31, 2009 600,000 How much income should Shepard recognized for the year ended December 31, 2009 a. 150,000b. 262,000c. 300,000d. 450,000
Ube Construction Company has consistently used the percentage of completion. On January 10, 2007, Ube began work on a P 6,000,000 construction contract. At the inception date, the estimated cost of construction was P 4,500,000. The following relate to the progress of the contract: Income recognized at 12/31/2007 P 600,000 Costs incurred 1/10/2007 through 12/31/2008 3,600,000 Estimated cost to complete at 12/31/2008 1,200,000 How much income should Ube recognize for the year ended December 31, 2001? P 300,000 P 525,000 P 600,000 P 900,000

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