Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. On January 1, Miller Construction Company contracted to build a storage building for the city of St. Denise for $825,000. The following transactions and estimates relate to this contractConstruction costs incurred during the year $440,000Progress billings$209,000Cash collectionsEstimated costs to completeRequiredAssuming that the company accounts for revenue at a point in time, prepare the journal entry to record profit or loss for Year 1.Account NameTo record profit or loss on contract$192,500$440,000Dr.0Cr.00

There are mainly two types of revenue recognition methods in construction contracts : Percentage of…

On January 1, Miller Construction Company contracted to build a storage building for the city of St. Denise for $825,000. The following transactions and estimates relate to this contra Construction costs incurred during the year $440,000 Progress billings $209,000 Cash collections $192,500 Estimated costs to complete $440,000 Required Assuming that the company accounts for revenue at a point in time, prepare the journal entry to record profit or loss for Year 1. Account Name To record profit or loss.on.contract Dr. Cr.

On January 1, Miller Construction Company contracted to build a storage building for the city of St. Denise for $825,000. The following transactions and estimates relate to this contra Construction costs incurred during the year $440,000 Progress billings $209,000 Cash collections $192,500 Estimated costs to complete $440,000 Required Assuming that the company accounts for revenue at a point in time, prepare the journal entry to record profit or loss for Year 1. Account Name To record profit or loss.on.contract Dr. Cr.

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

See similar textbooks

Similar questions

Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following transactions: Paid shipping of $1,000 Paid installation fees of $2,000 Pays annual maintenance cost of $200 Received a 5% discount on $25,000 sales price Determine the acquisition cost of the equipment.
During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
Johnson, Incorporated had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Purchased a copyright for $5,000 cash Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for major repairs If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?
Dominion construction is awarded a contract to build a commercial building. The contract price is $1,500,000 and during the first month of the job, the following transactions occurred: Cash expenditures to date $300,000 Total expenditures to date $350,000 Estimated expenditure to complete $1,100,000 Total estimated expenditures $1,450,000 Billing to date $280,000 Cash collected to date $250,000 What is "Revenue to Date" in Cash Method? 350000 280000 250000 300000
On March 1, Wenger Co. began construction of a small building. Payments of$120,000 were made monthly for three months beginning March 1. The buildingwas completed and ready for occupancy on June 1. In determining the amount ofinterest cost to be capitalized, the weighted-average accumulated expenditures area. $30,000.b. $60,000c. $120,000.d. $240,000.
Family Services, a small social service nonprofit agency, began operations on January 1, 20X1, with $40,000 cash and $150,000 worth of equipment, on which $60,000 was owed on a note to City Bank. The equipment was expected to have a remaining useful life of 15 years with no salvage value. During its first year of operations, ending December 31, 20X1, Family Services paid or accrued the following: A. Salaries and other personnel costs, $100,000 B. Rent and utilities, $24,000. C. Debt service: interest, $5,500, and payment on long-term note principal, $10,000 D. Capital outlay: additional equipment purchased January 3, $30,000, expected to last 6 years and have a $6,000 salvage value. E. Other current operating items paid with cash, $4,500. There were no prepayals or unrecorded accruals at December 31, 20X1, and no additional debt was incurred during the year. Required Compute for the Family Services agency, for the year ended December 31,…
The XYZ Construction Company was awarded a contract for $3,150,000 to build a new building XYZ estimates the cost to complete the contract at $2,700,000. The contract period was 36 months starting January 1, 2010. XYZ uses the cost to cost method of recognizing revenues under the percent of completion method. A schedule of construction activities for the years 2010-2012 follows: Yr. Costs incurred to date Est cost to complete Billings Collection 2010 1,225,000 1,475,000 1,415,000 1,300,000 2011 2,240,000 410,000 1,000,000 1,130,000 2012 2,640000 0 735,000 720,000 Calculate XYZ's gross profit for each year (2010, 2011, and 2012).
Crane Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,836,000 on March 1, $1,236,000 on June 1, and $3,038,370 on December 31.Crane Company borrowed $1,112,250 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,342,100 note payable and an 10%, 4-year, $3,467,800 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted-average interest rate enter the weighted-average interest rate rounded to 2 decimal places %
Crane Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,836,000 on March 1, $1,236,000 on June 1, and $3,038,370 on December 31.Crane Company borrowed $1,112,250 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,342,100 note payable and an 10%, 4-year, $3,467,800 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.)
Blossom Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,016,000 on March 1, $1,296,000 on June 1, and $3,041,650 on December 31.Blossom Company borrowed $1,115,400 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,469,300 note payable and an 10%, 4-year, $3,155,500 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.)
Construction Corporation has a contract to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 20×5. Actual costs were in line with estimated costs for 20×5 and 20×6. In 20×7, actual costs exceeded estimated costs by $150,000.Total construction costs incurred in each year were as follows:20X5: $2,700,00020X6: $4,500,00020X7: $1,800,000Progress billings based on the amount of work completed were collected each year. Star Construction uses the percentage-of-completion method. The percentage-of-completion is based on costs incurred compared with estimated total costs of the project.Company also billed the client and collected the following paymentsYear Billings Payments Received20X5: $2,300,000 $2,100,00020X6: $4,900,000 $4,700,00020X7: $3,750,000 $4,150,000Required: Calculate Net income for the construction…
Tamarisk Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,980,000 on March 1, $1,260,000 on June 1, and $3,040,930 on December 31. Tamarisk Company borrowed $1,078,330 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 5-year, $2,012,400 note payable and an 10%, 4-year, $3,382,000 note payable. Compute the weighted-average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted-average interest rate: %