Puff and Stuff Construction began a construction project in 2016. The contract price was $1,300,000 and estimated costs were $1,100,000. Data for each year follow: 2016 2017 2018 Costs incurred during the year $ 250,000 $ 600,000 $ 210,000 Estimated costs to complete $ 850,000 $ 230,000 $ - Partial billings $ 400,000 $ 600,000 $ 300,000 Collections $ 385,000 $ 610,000 $ 305,000 Required: Assuming Puff satisfies its performance obligation over time, determine: 1. The balance of Construction in Progress at the end of 2016. 2. How the net amount for construction in progress inventory should be reported on the 2017 balance sheet. 3. The gross profit for 2018.

Puff and Stuff Construction began a construction project in 2016. The contract price was $1,300,000 and estimated costs were $1,100,000. Data for each year follow: 2016 2017 2018 Costs incurred during the year $ 250,000 $ 600,000 $ 210,000 Estimated costs to complete $ 850,000 $ 230,000 $ - Partial billings $ 400,000 $ 600,000 $ 300,000 Collections $ 385,000 $ 610,000 $ 305,000 Required: Assuming Puff satisfies its performance obligation over time, determine: 1. The balance of Construction in Progress at the end of 2016. 2. How the net amount for construction in progress inventory should be reported on the 2017 balance sheet. 3. The gross profit for 2018.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 48P

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Puff and Stuff Construction began a construction project in 2016.
The contract price was $1,300,000 and estimated costs were $1,100,000.
Data for each year follow:

	2016	2017	2018
Costs incurred during the year	$ 250,000	$ 600,000	$ 210,000
Estimated costs to complete	$ 850,000	$ 230,000	$ -
Partial billings	$ 400,000	$ 600,000	$ 300,000
Collections	$ 385,000	$ 610,000	$ 305,000

Required:
Assuming Puff satisfies its performance obligation over time, determine:
1. The balance of Construction in Progress at the end of 2016.
2. How the net amount for construction in progress inventory should be reported on the 2017 balance sheet.
3. The gross profit for 2018.