Chapter 6, Problem 6.12P

Blossom Construction Company uses the percentage-of-completion method of accounting. In 2021, Blossom began work on a contract it had received which provided for a contract price of $47500000. Other details follow:   2021 Costs incurred during the year $22000000 Estimated costs to complete as of December 31 16000000 Billings during the year 21500000 Collections during the year 10500000 What should be the gross profit recognized in 2021?

During the year 2019, Height Cons began work on a contract for 3,700,000. Costs incurred during the year 1,800,000. Estimated costs to complete as of December 31= 1,200,000 Billings during the year1,650,000 Collections during the year 975,000 It uses the percentage-of-completion method. Find reporting gross profit?

Suppose that a contract is started on January 1, 2018, with an estimated completion date of December 31, 2019.  The final contract price is P1,500,000.  In the first year covering January 1 to December 31, 2018: Cost incurred amounted to P600,000. Half the work on the contract was completed. Certificates of work completed have been issued to the value of P750,000. It is estimated with reasonable certainty that further costs to completion in 2019 will be P600,000. Requirements: 1. The contract is certified at what percentage of completion? 2. At Dec 31, 2018, the entity will recognize how much profit? 3. At Dec 31, 2018, the entity will recognize how much contract asset?

The Lao Construction Company recognizes revenue over time according to percentage of completion for its long-term construction contracts. In 2024, Lao began work on a construction contract. Information on this contract at the end of 2024 is as follows: Cost incurred during the year $ 1,500,000 Estimated additional cost to complete 6,000,000 Gross profit recognized in 2024 250,000 What is the contract price (total revenue) on this contract?

In 2020, Blue Construction Corp. began construction work under a 3-year contract. The contract price was $1,060,000. Blue uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2020, are shown below. Balance Sheet Accounts receivable       $16,600 Construction in process   $63,700     Less: Billings   65,400     Costs and recognized profit in excess of billings       -1,700   Income Statement Income (before tax) on the contract recognized in 2020   $19,110 (a) How much cash was collected in 2020 on this contract? Portion of contract billings collected   $enter a dollar amount (b) What was the initial estimated total income before tax on this contract? Income before tax on this contract   $enter a…

In 2020, Steinrotter Construction Corp. began construction work under a 3-year contract. The contract price was $1,000,000. Steinrotter uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2020, are shown below. Balance Sheet     Accounts receivable   $18,000 Construction in process $65,000   Less: Billings 61,500   Costs and recognized profit in excess of billings   3,500 Income Statement     Income (before tax) on the contract recognized in 2020   $19,500 Instructions a.    How much cash was collected in 2020 on this contract? b.    What was the initial estimated total income before tax on this contract?

In 2020, Grouper Construction Corp. began construction work under a 3-year contract. The contract price was $1,060,000. Grouper uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2020, are shown below. Balance Sheet Accounts receivable       $17,700 Construction in process   $68,300     Less: Billings   61,300     Costs and recognized profit in excess of billings       7,000 Income Statement Income (before tax) on the contract recognized in 2020   $16,392 (a) How much cash was collected in 2020 on this contract? Portion of contract billings collected   $enter a dollar amount   (b) What was the initial estimated total income before tax on this contract? Income before tax on this contract   $enter a…

ABC Inc. began operations on July 1,2019. The company recognizes income from long term construction contracts under the percentage of completion method in its financial statements and under the cost recovery method for income tax purposes. Income under each are as follows: 2019 Cost recovery- P 0 % of completion- P 700,000 2020 Cost recovery- P 800,000 % of completion- P 1,280,000 2021 Cost recovery- P 1,350,000 % of completion- P 1,700,000 The income tax rate was 32% for 2019. Based on a new law, for years after 2019, the tax rate is 34%. There are no other temporary differences. ABC should report in its December 31,2021 a deferred tax liability of

3. Suppose the estimated costs to complete at the end of 2019 are $80 million instead of $60 million. Determinethe amount of revenue and gross profit or loss to be recognized in 2019 assuming Sanderson recognizes revenue over time according to percentage of completion.