Kiner, Inc. began work in 20x4 on a contract for $8,400,000. Other data are as follows: 20x4 20x5 Costs incurred to date $3,600,000 $5,600,000 Estimated costs to complete 2,400,000 — Billings during the year 2,800,000 8,400,000 Collections to year 2,000,000 7,200,000 1. If kiner uses the cost recovery method (point in time), the gross profit to be recognized in 20x5 is? 2. If Kiner uses the percentage-of-completion (over time) method, the gross profit to be recognized in 20x4 is

Kiner, Inc. began work in 20x4 on a contract for $8,400,000. Other data are as follows: 20x4 20x5 Costs incurred to date $3,600,000 $5,600,000 Estimated costs to complete 2,400,000 — Billings during the year 2,800,000 8,400,000 Collections to year 2,000,000 7,200,000 1. If kiner uses the cost recovery method (point in time), the gross profit to be recognized in 20x5 is? 2. If Kiner uses the percentage-of-completion (over time) method, the gross profit to be recognized in 20x4 is

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 18RE

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Kiner, Inc. began work in 2024 on a contract for $21,000,000. Other data are as follows: Cost incurred to date $9,000,000 14,000,000 Estimated costs to complete $6,000,000 - Billings to date $7,000,000 $21,000,000 Collections to date $5,000,000 $18,000,000 If Kiner uses the cost -recovery method, the gross profit to be recognized in 2025 is A) $14,000,000 B) $7,000,000 c) 3,500,000 D) 3,400,000
Stelle Technology has a contract to build a network for a customer for a total sales price of €10 million. Th e network will take an estimated three years to build, and total building costs are estimated to be €6 million. Stelle recognizes long-term contract revenue using the percentage-of-completion method and estimates percentage complete based on expenditure incurred as a percentage of total estimated expenditures. 1 . At the end of Year 1, the company had spent €3 million. Total costs to complete are estimated to be another €3 million. How much revenue will Stelle recognize in Year 1? 2 . At the end of Year 2, the company had spent an additional €2.4 million for an accumulated total of €5.4 million. Total costs to complete are estimated to be another €0.6 million. How much revenue will Stelle recognize in Year 2? 3 . At the end of Year 3, the contract is complete. Th e company spent an accumulated total of €6 million. How much revenue will Stelle recognize in Year 3?
At the end of the first year, the XYZ Team had incurred $550,000 of cost, with the total estimated cost of $1,050,000. Their total estimated revenue is $1,200,000. If the percentage of completion by labor hours expended is 60.8%, calculate the revenue to date for the labor hours expended method, using Alternative A.
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