During 2020, Sheridan Company started a construction job with a contract price of $1.760,000. The job was completed in 2022. The following information is available. The contract is non-cancellable Costs incurred to date Estimated costs to complete Billings to date (non-refundable) Collections to date Gross profit/(loss) 2020 2020 $440,000 660,000 302.500 330.000 990,000 297,000 891,000 $ 2021 $907.500 2022 Calculate the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. (Enter negative amounts using either a negative sign preceding the number eg-45 or parentheses eg (451) 2021 $1,177,000 0 1,760,000 1.567,500 2022 S

During 2020, Sheridan Company started a construction job with a contract price of $1.760,000. The job was completed in 2022. The following information is available. The contract is non-cancellable Costs incurred to date Estimated costs to complete Billings to date (non-refundable) Collections to date Gross profit/(loss) 2020 2020 $440,000 660,000 302.500 330.000 990,000 297,000 891,000 $ 2021 $907.500 2022 Calculate the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. (Enter negative amounts using either a negative sign preceding the number eg-45 or parentheses eg (451) 2021 $1,177,000 0 1,760,000 1.567,500 2022 S

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 24E

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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?
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CHAIN PROBLEM In 2020, MYIESHA Construction began work on a 3-year contract. The contract price was P 6,000,000. MYIESHA uses the percentage-of-completion method/over time for financial accounting purposes. The financial statement presentation relating to this contract at December 31, 2020 was as follows: BALANCE SHEET Accounts receivable-construction contracts 129,000 Construction in progress 390,000 Less: Contract Billings 369,000 Cost of uncompleted contract in excess of billings 21,000 INCOME STATEMENT Gross profit (before tax) recognized in 2020 109,200 Enter the letter of your answer. Use capital letters only. 1. How much was collected in 2020? А. 21,000 B. 129,000 C. 240,000 D. 369,000 2. What is the percentage of completion for the year ended? A. 6.5% B. 13% C. 28% D. 100% 3. What was the initial estimated gross profit on the contract? A. 109,200 B. 280,800 С. 390,000 D. 1,680,000 Please refer to the picture below to answer the question.
Creative Construction Company has consistently used the percentage of completion method of recognizing revenue. During 2019, Creative started work on a P15M fixed price construction contract. The accounting records disclosed the following data for the year ended December 31, 2019. Contract Costs incurred P4,650,000 Estimated costs to complete P10,850,000 Progress Billings 15,500,000 Collections P3,500,000 15. The loss that Creative Construction Company should have recognized in 2019 is a. P150,000 b. P500,000 C. P350,000 d P1,150,000
Current Attempt in Progress During 2020, Sheridan Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available. 2020 2021 2022 Costs incurred to date $396,000 $806,600 $1,080,000 Estimated costs to complete 594,000 283,400 –0– Billings to date 301,000 892,000 1,590,000 Collections to date 268,000 816,000 1,427,000 Prepare all necessary journal entries for 2021 Using the percentage of completion method. Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
Archer Construction Company began work on a $420,000 construction contract in 2020. During 2020, Archer incurred costs of $278,000, billed its customer for $215,000, and collected $175,000. At December 31, 2020, 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.
In 2020, Lalli Corporation incurred R&D costs as follows:Materials and equipment P100,000Personnel 100,000Indirect costs 50,000P250,000These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be recouped by December 31, 2024.Required What is the amount of R&D costs expense in 2020? Show the solution step by step
Headland Construction Company began work on a $404,000 construction contract in 2020. During 2020, Headland incurred costs of $273,000, billed its customer for $232,000, and collected $182,000. At December 31, 2020, the estimated additional costs to complete the project total $163,660.Prepare Headland’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method.
In 2020, Zeta Construction Corp. began work on a contract for $3,700,000. Other details follow: 2020 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 Zeta uses the percentage-of-completion method. For calendar 2020, Zeta should report gross profit of?
A company uses the percentage-of-completion method of accounting. In 2020, the company began work a project, which had a contract price of $23,700. Other details follow: 2020 2021 Costs incurred to date $6,000 $18,000 Estimated costs to complete, as of December 31 14,000 -0- Billings to date 11,350 17,460 Collections to date 9,390 16,260 At the end of 2020, what is the inventory/current liability related to the construction of this project? (Very important: if the company reports a current liability, then put a minus sign in front of the amount. If the company reports an inventory, then no plus or minus sign is needed.) (Do not round your answers in any part of the computation.)
In 2020, Lalli Corporation incurred R&D costs as follows:Materials and equipment P100,000Personnel 100,000Indirect costs 50,000P250,000These cost relate to a product that will be marketed in 2021. The Company estimates that these costs will be recouped by December 31, 2024.Required What is the amount of R&D costs expense in 2020?
ABC Construction Company began operations in 2020. Construction activity for the first year is shown below. All contracts are with different customers and any work remaining at December 31, 2020 is expected to be completed in 2021. Project Contract Price Billings Collections Actual Costs Additional cost to complete 1 5,600,000 3,600,000 3,400,000 4,500,000 1,125,000 2 6,700,000 2,200,000 2,100,000 1,260,000 5,040,000 3 5,200,000 5,200,000 4,935,125 3,800,000 0 The company uses the percentage of completion method in accounting for its projects. A. The amount of construction cost recognized for Project 1 at the 2020 year – end is? B. The amount of accounts receivable reported by ABC in the year- end balance sheet is? C. The amount of inventory reported for the projects in the year- end balance sheet is?