a) Using percentage-of-completion method, prepare schedules to compute the profit and loss to be recognized as a result of this contract for the year ended October 31, 2019, 2020 and 2021. b) Using cost recovery method, prepare schedules to compute the profit and loss to be recognized as a result of this contract for the year ended October 31, 2019, 2020 and 2021.
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- On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?ABC Construction Company began work on a contract in 2022 and completed the contract in 2023. The total contact price was P8,500,000. Information related to the construction project are as follows: 2022 2023 Costs incurred during the year P1,200,000 P6,250,000 Estimated costs to complete 4,800,000 - Progress billings during the year 1,450,000 7,050,000 Collections during the year 800,000 6,000,000 How much is the gross profit to be recognized in 2023?in 2021, the southgate construction company entered into a contract to construct a bridge for $12,000,000. the bridge was completed in 2023. information related to the contract is as follows: 2021 2022 2023 cost incurred during the year $1,840,000 $3,760,000 $4,500,000 estimated costs to complete as of year-end $6,160,000 $4,400,000 $0 billings during the year $3,000,000 $4,000,000 $5,000,000 cash collections during thee year $2,600,000 $3,900,000 $5,100,000 southgate recognizes revenue using the completed contract method. what amount will southgate show on the balance sheet at december 31, 2022? multiple choice costs in excess of billings (asset) $5,600,000 billings in excess of costs (liability) $1,400,000 billings in excess of costs (liability) $280,000 costs in excess of billings (asset) $280,000 If answered within one hour,it would be appreciable!! answer all questions.
- On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: 2020 2021 2022 Total costs incurred during the year 4,500,000 5,300,000 4,000,000 Estimated costs to complete 7,500,000 4,200,000 1,800,000 Customer billings to date 6,600,000 12,000,000 13,800,000 Collections to date 6,000,000 10,500,000 13,500,000 Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. Using the cost-recovery method,…On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: 2020 2021 2022 Total costs incurred during the year 4,500,000 5,300,000 4,000,000 Estimated costs to complete 7,500,000 4,200,000 1,800,000 Customer billings to date 6,600,000 12,000,000 13,800,000 Collections to date 6,000,000 10,500,000 13,500,000 Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. Using the cost-recovery method,…Paul Constructions has entered into a contract beginning January 1, 2020, to build a pool. It has been estimated that the pool will cost P300,000, and will take three years to construct. The pool will be billed to the purchasing at P450,000. The following data pertain to the construction period. 2020 135,000 165,000 2021 210,000 90,000 2022 0 Cost to date: Estimated cost to complete. Progress billing to date. Cash collected to date 135.000 120.000 275.000 250,000 450,000 450.000 During 2020, Costs incurred include P15,000 standard materials stored at the site to be used in 2022 to complete the project. Using the percentage of completion method, compute the recognize gross profit for 2022: a. 52,500 b. 45,000 c. 97.500 d. 150,000 2. The CIP net of Progress billing is a. 27.500 current liability b. 32,500 current asset c. 167,500 current asset. d. 102,500 current liability
- On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $220 million. The expected completion date is April 1, 2020, just in time for the2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are asfollows ($ in millions):2018 2019 2020Costs incurred during the year $ 40 $80 $50Estimated costs to complete as of December 31 120 60 —Required:1. How much revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements relatedto this contract assuming Sanderson recognizes revenue over time according to percentage of completion?On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which is estimated to cost P31,200,000. The company recognizes construction revenue over time. Data on this project for 2022-2024 follow: Contract Billings Costs incurred Est'd Costs to complete 2022 10,500,000 5,460,000 20,540,000 2023 12,500,000 9,984,000 13,156,000 2024 14,440,000 15,756,000 - The contract contains a penalty clause that penalizes the company a reduction of P70,000 from the contract price for every week of delay. In 2024, the contract was delayed for 8 weeks. What is the gross profit for 2024?A. 1,164,000 C. 1,724,000B. 1,466,400 D. 1,824,000Sunshine Bhd. entered a contract to build a building for its customer with the agreed total price of $3,200,000. The project is expected to last for 3 years with the total cost of $1,600,000. The following table shows the progress of the work: 31 Dec 2018 31 Dec 2019 31 Dec 2020 Completion (Market Value) $950,000 $2,600,000 $3,200,000 Cost incurred to date $400,000 $1,000,000 $1,600,000 Required: For each year, compute the recognized profit based on input method. For each year, compute the recognized profit based on output method. Please answer required 1,2
- On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: Total costs incurred during the year Estimated costs to complete Customer billings to date Collections to date 2020 4,500,000 7,500,000 6,600,000 6,000,000 2021 5,300,000 4,200,000 12,000,000 10,500,000 2022 4,000,000 1,800,000 13,800,000 13,500,000 a. Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. b. Using the cost-recovery method, prepare schedules to compute the profit or loss to be recognized as a result of this contract all the necessary journal entries to record the costs,…Shanahan Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $609,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $896,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $266,640 $412,080 $617,000 Estimated costs to complete 339,360 193,9200 –0– Progress billings to date 270,000 545,000 896,000 Cash collected to date 240,000 495,000 896,000 A/ Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. Gross profit recognized in 2020: Gross profit recognized in 2021: Gross profit recognized in 2022: B/ Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period. Gross profit recognized in 2020: Gross profit recognized in 2021: Gross…In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows: 2018 2019 2020 Cost incurred during the year $ 2,184,000 $ 3,510,000 $ 2,316,600 Estimated costs to complete as of year-end 5,616,000 2,106,000 0 Billings during the year 2,120,000 3,574,000 4,306,000 Cash collections during the year 1,860,000 3,400,000 4,740,000 Westgate recognizes revenue over time according to percentage of completion. rev: Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2018 2019 2020 Cost incurred during the year $ 2,184,000 $ 3,860,000 $ 3,260,000 Estimated costs to complete as…