Hello please can you explain the step on the exercise were do the number come from thanks Question8Page 18-71W*P18.10 (LO 5, 6, 7) (Long-Term Contract with Interim Loss) On March 1, 2020,Pechstein Construction Company contracted to construct a factory building forFabrik Manufacturing Inc. for a total contract price of $8,400,000. The building wascompleted by October 31, 2022. The annual contract costs incurred, estimatedcosts to complete the contract, and accumulated billings to Fabrik for 2020, 2021,and 2022 are given below.202020212022Contract costs incurred during the year $2,880,000 $2,230,000 $2,190,000Estimated costs to complete the3,520,0002,190,000-0-contract at 12/31Billings to Fabrik during the year3,200,000Dr your resume3,500,000Instructionsa. Using the percentage-of-completion method, prepare schedules to computethe profit or loss to be recognized as a result of this contract for the yearsended December 31, 2020, 2021, and 2022. (Ignore income taxes.)b. Using the completed-contract method, prepare schedules to compute the profitor loss to be recognized as a result of this contract for the years endedDecember 31, 2020, 2021, and 2022. (Ignore incomes taxes.)Korpul Wind1,700,000Resume 12023(1) P많Try freePoArto2

The percentage of completion contract method is used to account for revenue and cost to be…

ge 18-71 "P18.10 (LO 5, 6, 7) (Long-Term Contract Pechstein Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,400,000. The building was completed by October 31, 2022. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2020, 2021, and 2022 are given below. 2020 Contract costs incurred during the year $2,880,000 2021 2022 $2,880,000 $2,230,000 $2,190,000 3,520,000 2,190,000 -0- 3,200,000 3,500,000 Estimated costs to complete the contract at 12/31 Billings to Fabrik during the year 1,700,000 Instructions a. Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) b. Using the completed-contract method, prepare schedules to compute the profit ocult of this contract for the years ended

ge 18-71 "P18.10 (LO 5, 6, 7) (Long-Term Contract Pechstein Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,400,000. The building was completed by October 31, 2022. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2020, 2021, and 2022 are given below. 2020 Contract costs incurred during the year $2,880,000 2021 2022 $2,880,000 $2,230,000 $2,190,000 3,520,000 2,190,000 -0- 3,200,000 3,500,000 Estimated costs to complete the contract at 12/31 Billings to Fabrik during the year 1,700,000 Instructions a. Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) b. Using the completed-contract method, prepare schedules to compute the profit ocult of this contract for the years ended

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 9MC

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43. On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 Percentage of completion 25% 75% Estimated costs at completion P6,750,000 P7,200,000 How much is the contract costs charged to profit or loss in 2022?
41. On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 Percentage of completion 25% 75% Estimated costs at completion P6,750,000 P7,200,000 How much is the gross profit to be recognized in 2023?
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7...new.e1..... Sage Industries and Pronghorn Inc. enter into an agreement that requires Pronghorn Inc. to build three diesel-electric engines to Sage’s specifications. Upon completion of the engines, Sage has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is non-cancelable, becomes effective on January 1, 2020, and requires annual rental payments of $405,443 each January 1, starting January 1, 2020.Sage’s incremental borrowing rate is 8%. The implicit interest rate used by Pronghorn and known to Sage is 7%. The total cost of building the three engines is $2,685,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Sage depreciates similar equipment on a straight-line basis. At the end of the lease, Sage assumes title to the engines. Collectibility of the lease payments is probable. (e1) Prepare a lease amortization schedule for 2 years. (Round answers to 0 decimal…
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