February 1, 2021, Arrow Construction Company entered into a three-year construction.contract to build a bridge for a price of 325,000. During 2021, costs of $2,130,000 were incurred, with estimated costs of $4,130,000 yet to be incurred. Billings of 656,000 were sent, and cash collected was $2,380,000. 2022, costs incurred were $2,656,000 with remaining costs estimated to be $3,795,000. 2022 billings were $2,906,000, and 605,000 cash was collected. The project was completed in 2023 after additional costs of $3,930,000 were incurred. The mpany's fiscal year-end is December 31. This project does not qualify for revenue recognition over time. quired: Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. -Prepare Joumal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurredi - Prepare journal entries for 2022 to record the transactions described (credit "various accounts" for construction costs incurrec -Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021.
February 1, 2021, Arrow Construction Company entered into a three-year construction.contract to build a bridge for a price of 325,000. During 2021, costs of $2,130,000 were incurred, with estimated costs of $4,130,000 yet to be incurred. Billings of 656,000 were sent, and cash collected was $2,380,000. 2022, costs incurred were $2,656,000 with remaining costs estimated to be $3,795,000. 2022 billings were $2,906,000, and 605,000 cash was collected. The project was completed in 2023 after additional costs of $3,930,000 were incurred. The mpany's fiscal year-end is December 31. This project does not qualify for revenue recognition over time. quired: Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. -Prepare Joumal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurredi - Prepare journal entries for 2022 to record the transactions described (credit "various accounts" for construction costs incurrec -Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021.
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 25E: Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and...
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