Gary Construction Associates accepted a contract to build an office building on January 2, 2022. The company will complete the contract within two years. Gary provided the following information related to the revenue, estimated costs, progress billings, and collections over the two-year period (Click the icon to view the contract information) Requirement Prepare the journal entries for each year to record the contract assuming that Gary uses the completed-contract method (show all supporting computations)

Gary Construction Associates accepted a contract to build an office building on January 2, 2022. The company will complete the contract within two years. Gary provided the following information related to the revenue, estimated costs, progress billings, and collections over the two-year period (Click the icon to view the contract information) Requirement Prepare the journal entries for each year to record the contract assuming that Gary uses the completed-contract method (show all supporting computations)

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 35E

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Entity 2 entered contracts with two separate customers on 1 January 2022. The following information relates to these two contracts for 2022. A B £’000 £’000 Total contract price 40,000 40,000 Costs incurred to date 12,000 12,000 Anticipated further costs to completion 18,000 18,000 Cumulative progress billings invoiced 10,000 10,000 Cumulative progress billings received 8,000 8,000 Only contract A’s performance obligation is satisfied over time. Entity 2 is using the input method to determine the percentage of completion. Show how these two contracts should be presented in Entity 2’s financial statements for 2022.
In 20x1, XYZ Company enters into a construction contract with a customer. The contract price is P10,000,000.Information on the contract follows:20X1 20X2 20X3Contract costs incurred during the year P2,645,132 P236,451 P2,657,000Estimated costs to complete 2,697,451 2,116,777 -Progress Billings 5,000,000 3,000,000 2,000,000Collections on progress billings 2,000,000 4,000,000 4,000,000 Using the cost-to-cost method, Note: Use up to two (2) decimal places in presenting the answer for percentage of completion. Use six (6)decimal places when applying the percentage.1. Percentage of completion for 20x1 _____________2. Revenue that should be recognized in 20x1 _____________3. Realized gross profit in 20x1 _____________4. Balance of "Contract Liability" at the end of 20x1 _____________
In 20x1, XYZ Company enters into a construction contract with a customer. The contract price is P10,000,000.Information on the contract follows:20X1 20X2 20X3Contract costs incurred during the year P2,645,132 P236,451 P2,657,000Estimated costs to complete 2,697,451 2,116,777 -Progress Billings 5,000,000 3,000,000 2,000,000Collections on progress billings 2,000,000 4,000,000 4,000,000Using the cost-to-cost method, compute the following: Note: Use up to two (2) decimal places in presenting the answer for percentage of completion. Use six (6)decimal places when applying the percentage.7. Realized gross profit in 20x2 _____________8. The balance of "Contract Liability" at the end of 20x2 _____________9. Revenue that should be recognized in 20x3 _____________10. Realized gross profit in 20x3
In 20x1, XYZ Company enters into a construction contract with a customer. The contract price is P10,000,000.Information on the contract follows:20X1 20X2 20X3Contract costs incurred during the year P2,645,132 P236,451 P2,657,000Estimated costs to complete 2,697,451 2,116,777 -Progress Billings 5,000,000 3,000,000 2,000,000Collections on progress billings 2,000,000 4,000,000 4,000,000 Using the cost-to-cost method, compute the following: Note: Use up to two (2) decimal places in presenting the answer for percentage of completion. Use six (6)decimal places when applying the percentage.4. Balance of "Contract Liability" at the end of 20x1 _____________5. Percentage of completion for 20x2 _____________6. Revenue that should be recognized in 20x2 _____________
Recording Long-Term Construction: Recognize Revenue at a Point in Time and Over Time Watson Construction Company contracted to build a plant for $500,000. Construction started in January 2020 and was completed in November 2021. Watson uses the cost-to-cost method to measure the completion of its performance obligations. Data relating to the contract follow. 2020 2021 Costs incurred during year $290,000 $120,000 Estimated additional costs to complete 125,000 0 Billings during year 270,000 230,000 Cash collections during year 250,000 250,000 Revenue Recognized at a Point in Time Revenue Recognized Over Time a. Provide the 2020 and 2021 journal entries for Watson assuming revenue is recognized at a point in time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, and (4) revenues and expenses. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr.…
2020 2019 Receivable from Construction contract Costs incurred each year. Construction in progress Partial billings on contract Collection each year P252,000 P240,000 460,800 292,800 873,600 240,000 720,000 2,167,000 8. The gross profit recognize from the long term construction contract is: 2019 2020 a. P52,800 P52,800 P547,200 b. P40,800 P240,000 C. d. P40,800 P307,200 P120,000
B. An entity provided the following information during the current year:January 1 December 31Fair value of plan assets 6,000,000 9,000,000Projected benefit obligation 4,500,000 5,000,000Prepaid/accrued benefit cost – surplus 1,500,000 4,000,000Asset ceiling 1,000,000 2,500,000Effect of asset ceiling 500,000 1,500,000During the year, the entity recognized current service cost P2,000,000, actual return on plan assets P400,000,and contribution to the plan P4,550,000 and benefits paid P1,950,000. The discount rate is 10% REQUIRED:7. Compute the net remeasurement loss for the current year
B. An entity provided the following information during the current year:January 1 December 31Fair value of plan assets 6,000,000 9,000,000Projected benefit obligation 4,500,000 5,000,000Prepaid/accrued benefit cost – surplus 1,500,000 4,000,000Asset ceiling 1,000,000 2,500,000Effect of asset ceiling 500,000 1,500,000During the year, the entity recognized current service cost P2,000,000, actual return on plan assets P400,000,and contribution to the plan P4,550,000 and benefits paid P1,950,000. The discount rate is 10% REQUIRED:8. Compute the defined benefit cost
B. An entity provided the following information during the current year:January 1 December 31Fair value of plan assets 6,000,000 9,000,000Projected benefit obligation 4,500,000 5,000,000Prepaid/accrued benefit cost – surplus 1,500,000 4,000,000Asset ceiling 1,000,000 2,500,000Effect of asset ceiling 500,000 1,500,000During the year, the entity recognized current service cost P2,000,000, actual return on plan assets P400,000,and contribution to the plan P4,550,000 and benefits paid P1,950,000. The discount rate is 10% REQUIRED:9. Compute the amount of prepaid benefit cost that should be reported on December 31
B. An entity provided the following information during the current year:January 1 December 31Fair value of plan assets 6,000,000 9,000,000Projected benefit obligation 4,500,000 5,000,000Prepaid/accrued benefit cost – surplus 1,500,000 4,000,000Asset ceiling 1,000,000 2,500,000Effect of asset ceiling 500,000 1,500,000During the year, the entity recognized current service cost P2,000,000, actual return on plan assets P400,000,and contribution to the plan P4,550,000 and benefits paid P1,950,000. The discount rate is 10% REQUIRED: 6. Compute the employee benefit expense for the current year
4SMC entered into a long-term construction contract for 3 years. Contract price agreed was P4,150,000. The outcome of the contract was estimated reliably. The following data were ascertained for the contract:December 31, 2021December 31, 2022Percentage of completion30%82.5%Estimated cost to complete1,960,000840,0001.What is the total cost incurred in year 2022? 1.What is the total cost incurred in year 2022? A.4,073,750 C. 1,680,000. B.840,000. D. 3,120,000 2.The realized gross profit (loss) in year 2022 is A.650,000. C. (. 245,000) B.405,000 D. (1,055,000) 3.What is the construction cost of sales for year 2022? A.3,960,000. C. 3,233,750 B.3,120,000. D. 4,478,750 4.What is the construction-in-progress as of 2022? A.3,423,750. C. 2,065,000 B.3,310,000. D. 2,470,000
Long-term Contracts Clorad Corp. contracts with a customer to construct a building. It appropriately determines that it has one performance obligation which is satisfied over time. Using the following information for Year 1, compute Clorad's (a) total estimated costs for the contract, (b) revenue to date, and (c) gross profit recognized. Year 1 (of 4-year project): Construction costs incurred during the year $174,000 Estimated costs to complete the contract 426,000 Partial billings to customers 100,000 Collections from customers 25,000 Total contract price 1,000,000 (a) Total estimated costs for the contract $ (b) Revenue to date $ (c) Gross profit recognized $