On July 1, 2020, Blue Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,910,000. On July 1, Blue estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022. Contract costs incurred to date Estimated costs to complete the contract At 12/31/20 At 12/31/21 $327,800 $1,180,000 1,162,200 820,000 At 12/31/22 $2,090,400 -0-
On July 1, 2020, Blue Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $1,910,000. On July 1, Blue estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021, and 2022. Contract costs incurred to date Estimated costs to complete the contract At 12/31/20 At 12/31/21 $327,800 $1,180,000 1,162,200 820,000 At 12/31/22 $2,090,400 -0-
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 58P
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Question
Q-15
Transcribed Image Text:On July 1, 2020, Blue Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total
contract price of $1,910,000. On July 1, Blue estimated that it would take between 2 and 3 years to complete the
building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated
contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gumbel for 2020, 2021,
and 2022.
Contract costs incurred to date
Estimated costs to complete the contract
Billings to Gumbel
2020
+
2021
At
12/31/20
At
12/31/21
$327,800 $1,180,000
1,162,200
820,000
1,110,000
+
(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.) (If answer is
0. please enter 0. Do not leave any field blank. If an amount should be deducted then enter the
amount using either a negative sign prececeding the number e.g. -45 or parenthesis e.g. (45).)
$
$
$
$
$
$
300,000
$
At
12/31/22
$2,090,400
2022
-0-
1,870,000
%
Transcribed Image Text:eTextbook and Media
(b) Using the completed-contract 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.) (If answer is 0.
please enter 0. Do not leave any fields blank. If an amount should be deducted then enter the amount
using either a negative sign prececeding the number e.g. -45 or parenthesis e.g. (45).)
List of Accounts
2021
2022
2022
$
$
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