Exercise 18-33 (Recognition of Profit on Long-Term Contracts) During 2022, Nelson Company started a construction job with a contract price of $1,600,000. The job was completed in 2024. The following information is available: Contract cost incurred to date Estimated costs to complete Billings to date Collections to date Instructions: 2022 $400,000 600,000 300,000 270,000 2024 2023 $825,000 $1,070,000 275,000 900,000 810,000 1,600,000 1,425,000 (a) Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. 0 (b) Prepare all necessary journal entries for 2023. (c) Compute the amount of gross profit to be recognized each year, assuming the cost- recovery method is used.

Exercise 18-33 (Recognition of Profit on Long-Term Contracts) During 2022, Nelson Company started a construction job with a contract price of $1,600,000. The job was completed in 2024. The following information is available: Contract cost incurred to date Estimated costs to complete Billings to date Collections to date Instructions: 2022 $400,000 600,000 300,000 270,000 2024 2023 $825,000 $1,070,000 275,000 900,000 810,000 1,600,000 1,425,000 (a) Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. 0 (b) Prepare all necessary journal entries for 2023. (c) Compute the amount of gross profit to be recognized each year, assuming the cost- recovery method is used.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 34E

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