Monty, Inc. began work on a $6,344,000 contract in 2022 to construct an office building. Monty uses the cost-recovery method. At December 31, 2022, the balances in certain accounts were Construction in Process $1,667,000, Accounts Receivable $247,000, and Billings on Construction in Process $911,000. Indicate how these accounts would be reported in Monty's December 31, 2022, statement of financial position. (List assets in reverse order of liquidity.) Current Assets Inventories Construction in Process Less ✓ Costs in Excess of Billings Accounts Receivable Monty, Inc. Statement of Financial Position December 31, 2022 Costs in Excess of Billings $ tA 1,667,000 911,000 i $ LA 247,000 756,000

Monty, Inc. began work on a $6,344,000 contract in 2022 to construct an office building. Monty uses the cost-recovery method. At December 31, 2022, the balances in certain accounts were Construction in Process $1,667,000, Accounts Receivable $247,000, and Billings on Construction in Process $911,000. Indicate how these accounts would be reported in Monty's December 31, 2022, statement of financial position. (List assets in reverse order of liquidity.) Current Assets Inventories Construction in Process Less ✓ Costs in Excess of Billings Accounts Receivable Monty, Inc. Statement of Financial Position December 31, 2022 Costs in Excess of Billings $ tA 1,667,000 911,000 i $ LA 247,000 756,000

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 10P

See similar textbooks

Similar questions

Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.
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?
The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the Machinery account. At the beginning of 2019, the book value of the machinery was 100,000. No residual value is expected, the remaining estimated life is 10 years, and straight-line depreciation is used. b. All purchases of materials for construction contracts still in progress have been immediately expensed. It is discovered that the use of these materials was 10,000 during 2018 and 12,000 during 2019. c. Depreciation on manufacturing equipment has been excluded from manufacturing costs and treated as a period expense. During 2019, 40,000 of depreciation was accounted for in that manner. Production was 15,000 units during 2019, of which 3,000 remained in inventory at the end of the year. Assume there was no inventory at the beginning of 2019. Required: Prepare journal entries for the preceding errors discovered during 2020. Ignore income taxes.
During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.