On July 1, 2020, Crane Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $ 1,910,000. On July 1, Crane 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. At At At 12/31/20 12/31/21 12/31/22 Contract costs incurred to date $327,800 $ 1,180,000 $ 2,090,400 Estimated costs to complete the contract 1,162,200 820,000 -0- Billings to Gumbel 300,000 1,110,000 1,870,000
On July 1, 2020, Crane Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of $ 1,910,000. On July 1, Crane 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. At At At 12/31/20 12/31/21 12/31/22 Contract costs incurred to date $327,800 $ 1,180,000 $ 2,090,400 Estimated costs to complete the contract 1,162,200 820,000 -0- Billings to Gumbel 300,000 1,110,000 1,870,000
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 21P
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Transcribed Image Text:On July 1, 2020, Crane Construction Company Inc. contracted to build an office building for Gumbel Corp. for a total contract price of
$ 1,910,000. On July 1, Crane 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.
At
At
At
12/31/20
12/31/21
12/31/22
Contract costs incurred to date
$327,800
$ 1,180,000
$ 2,090,400
Estimated costs to complete the contract
1,162,200
820,000
-0-
Billings to Gumbel
300,000
1,110,000
1,870,000
Transcribed Image Text:(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 eg. -45 or parenthesis e-g.
(45).)
2021
Estimated Total Costs
Contract Price
Profit/ (Loss) Recognized in 2021
2$
2022
Costs Incurred
$
Contract Price
Total Profit/(Loss) on Contract
Profit/(Loss) Recognized in 2021 v
Profit / (Loss) Recognized in 2022
$4
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