Question. Prepare a partial balance sheet to indicate how the above contract information would be reported. Ayayai uses the completed-contract method. Ayayai Construction, Inc. experienced the following construction activity in 2021, the firstyear of operations.ContractXYNTotalContractPrice$254,000323,00229,000BillingsThrough12/31/21$161,000112,000229,000CashCollectionsThrough12/31/21$148,000108,000192,000CostsIncurredThrough12/31/21$174,000100,000158,000EstimatedAdditionalCosts toComplete$ 56,000252,000-0-$806,000 $502,000$448,000$432,000$308,000Each of the above contracts is with a different customer, and any work remaining atDecember 31, 2021 is expected to be completed in 2022.

Construction company used contract accounting techniques for maintaining its books of accounts in…

Answered: Question. Prepare a partial balance…

Question. Prepare a partial balance sheet to indicate how the above contract information would be reported. Ayayai uses the completed-contract method.

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 26E

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

Question. Prepare a partial balance sheet to indicate how the above contract information would be reported. Ayayai uses the completed-contract method.

Ayayai Construction, Inc. experienced the following construction activity in 2021, the first
year of operations.
Contract
X
Y
N
Total
Contract
Price
$254,000
323,00
229,000
Billings
Through
12/31/21
$161,000
112,000
229,000
Cash
Collections
Through
12/31/21
$148,000
108,000
192,000
Costs
Incurred
Through
12/31/21
$174,000
100,000
158,000
Estimated
Additional
Costs to
Complete
$ 56,000
252,000
-0-
$806,000 $502,000
$448,000
$432,000
$308,000
Each of the above contracts is with a different customer, and any work remaining at
December 31, 2021 is expected to be completed in 2022.

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