Manor Construction Corporation entered into a fixed-price contract to construct an office building for P5,000,000 during the year 2021. Information relating to the contract is as follows: Year-end 2021 Year-end 2022 Percentage of completion 20% 60% Estimated total cost of completion 3,750,000 4,000,000 Income recognized (cumulative) 250,000 600,000 Contract cost incurred during 2022 was: Group of answer choices 1,600,000 1,650,000 1,750,000 2,400,000

Manor Construction Corporation entered into a fixed-price contract to construct an office building for P5,000,000 during the year 2021. Information relating to the contract is as follows: Year-end 2021 Year-end 2022 Percentage of completion 20% 60% Estimated total cost of completion 3,750,000 4,000,000 Income recognized (cumulative) 250,000 600,000 Contract cost incurred during 2022 was: Group of answer choices 1,600,000 1,650,000 1,750,000 2,400,000

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

See similar textbooks

Similar questions

On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
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?
55 On March 1, 2022, ABC Co. was contracted to construct a building for a customer at a total contract price of P16,500,000. The building was estimated to be completed in 2024. The following data were made available: 2022 2023 2024 Contract costs incurred P6,400,000 P5,200,000 P2,900,000 Estimated costs to complete 6,400,000 2,900,000 - Progress billings each year 6,400,000 7,000,000 3,100,000 How much is the realized gross profit for 2024?
56 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? 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?
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?
Kiddo Construction Company uses the percentage-of-completion method. During 2021, the company entered into a fixed-price contract to construct a building for Massy Group of Companies for $30,000,000. The following details pertain to the contract: At December 31, 2021 At December 31, 2022 Percentage of completion 25% 60% Estimated total cost of contract $22,500,000 $25,000,000 Gross profit recognized to date 1,875,000 3,000,000 Calculate the amount of construction costs incurred during 2022.
Fender Construction Company receives a contract to construct a building over a period of 3 years for a price of $700,000. The contract represents a single performance obligation that will be satisfied over time. Information relating to the performance of the contract is summarized as follows: 2019 2020 2021 Construction costs incurred during the year $150,000 $242,000 $168,000 Estimated costs to complete 350,000 168,000 — Billings during the year 120,000 250,000 330,000 Collections during the year 100,000 260,000 340,000 Required: 1. Prepare journal entries for all 3 years. 2. Assume that the contract represents a single performance obligation that will be satisfied at a point in time. Prepare journal entries for all 3 years. 1. Assume the contract represents a single performance obligation that will be satisfied over time. Prepare journal entries on December 31 for all 3 years -to record costs of construction for cash -to record partial…
Fender Construction Company receives a contract to construct a building over a period of 3 years for a price of $700,000. The contract represents a single performance obligation that will be satisfied over time. Information relating to the performance of the contract is summarized as follows: 2019 2020 2021 Construction costs incurred during the year $150,000 $242,000 $168,000 Estimated costs to complete 350,000 168,000 — Billings during the year 120,000 250,000 330,000 Collections during the year 100,000 260,000 340,000 Required: 1. Prepare journal entries for all 3 years. 2. Assume that the contract represents a single performance obligation that will be satisfied at a point in time. Prepare journal entries for all 3 years. Please dont provide image based answers thank you
Santiago builders began construction work in 2021 for a project with contract price of P24,000,000. Santiago Builders uses percentage of completion. The financial statements for 2021 relating to the contract show the following: Accounts receivable. P 1,500,000 Construction in progress. 4,800,000 Contract billings to date. 4,500,000 Realized gross profit in 2021. 600,000 1.Compute the total cost incurred to date A.4,200,000. C. 5,400,000 B.4,800,000. D. 5,100,000 2.Compute the cash collection during 2021 A.3,000,000. C. 2,100,000 B.4,200,000. D. 3,900,000
On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: 2020 2021 2022 Total costs incurred during the year 4,500,000 5,300,000 4,000,000 Estimated costs to complete 7,500,000 4,200,000 1,800,000 Customer billings to date 6,600,000 12,000,000 13,800,000 Collections to date 6,000,000 10,500,000 13,500,000 Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. Using the cost-recovery method,…
On February 1, 2020, Mar Contractors agreed to construct a building at a contract price of $15,400,000. Mar initially estimated total construction costs would be $12,000,000 and the project would be finished in 2023. Information relating to the costs and billings for this contract during 2020-2022 is as follows: 2020 2021 2022 Total costs incurred during the year 4,500,000 5,300,000 4,000,000 Estimated costs to complete 7,500,000 4,200,000 1,800,000 Customer billings to date 6,600,000 12,000,000 13,800,000 Collections to date 6,000,000 10,500,000 13,500,000 Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract and all the necessary journal entries for the years ended December 31, 2020, 2021, and 2022. Using the cost-recovery method,…
21 Beck Construction Company began work on a new building project on January 1, 2023. The project is to be completed by December 31, 2025, for a fixed price of $131 million. The following are the actual costs incurred and estimates of remaining costs to complete the project that were made by Beck's accounting staff: Years Actual costs incurred in each year Estimated remaining costs to complete the project (measured atDecember 31 of each year) 2023 $ 36 million $ 72 million 2024 $ 57 million $ 57 million 2025 $ 41 million $ 0 million Required: What amount of gross profit (or loss) would Beck record on this project in each year, assuming that Beck recognizes revenue for this project upon completion of the project?

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

SEE MORE TEXTBOOKS

GET THE APP

About FAQ Academic Integrity Sitemap Document Sitemap

Contact Bartleby Contact Research (Essays)High School Textbooks Literature Guides Concept Explainers by Subject Essay Help Mobile App

GET THE APP

Privacy

Your CA Privacy Rights

Your NV Privacy Rights

About Ads

Manage My Data

bartleby, a Learneo, Inc. business

	Year-end 2021	Year-end 2022
Percentage of completion	20%	60%
Estimated total cost of completion	3,750,000	4,000,000
Income recognized (cumulative)	250,000	600,000