In 2019, Tarlo Company agrees to construct a highway for Brice County over a 3-year period (2019 through 2021). The contract price is $1,200,000, and the construction costs (both actual and estimated) total $705,000 for the 3 years. Tarlo's estimate of progress toward satisfaction of the performance obligation at the end of each year is as follows: 2019, 20%; 2020, 75%; 2021, 100%. Required: 1. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is determined to be satisfied over time. Tarlo Company Gross Profit: Percentage-of Completion Method 2019 through 2021 Amount 2019 $ 2020 2021 Total gross profit $ 2. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is satisfied at a point in time. If an amount is zero, enter "0". Tarlo Company Gross Profit: Completed-Contract Method 2019 through 2021 Amount 2019 $ 2020 2021 Total gross profit $
In 2019, Tarlo Company agrees to construct a highway for Brice County over a 3-year period (2019 through 2021). The contract price is $1,200,000, and the construction costs (both actual and estimated) total $705,000 for the 3 years. Tarlo's estimate of progress toward satisfaction of the performance obligation at the end of each year is as follows: 2019, 20%; 2020, 75%; 2021, 100%. Required: 1. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is determined to be satisfied over time. Tarlo Company Gross Profit: Percentage-of Completion Method 2019 through 2021 Amount 2019 $ 2020 2021 Total gross profit $ 2. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is satisfied at a point in time. If an amount is zero, enter "0". Tarlo Company Gross Profit: Completed-Contract Method 2019 through 2021 Amount 2019 $ 2020 2021 Total gross profit $
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter9: Operating Activities
Section: Chapter Questions
Problem 18PC
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In 2019, Tarlo Company agrees to construct a highway for Brice County over a 3-year period (2019 through 2021). The contract price is $1,200,000, and the construction costs (both actual and estimated) total $705,000 for the 3 years. Tarlo's estimate of progress toward satisfaction of the performance obligation at the end of each year is as follows: 2019, 20%; 2020, 75%; 2021, 100%.
Required:
1. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is determined to be satisfied over time.
| Tarlo Company | |
| Gross Profit: Percentage-of Completion Method | |
| 2019 through 2021 | |
| Amount | |
| 2019 | $ |
| 2020 | |
| 2021 | |
| Total gross profit | $ |
2. Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year assuming the performance obligation is satisfied at a point in time. If an amount is zero, enter "0".
| Tarlo Company | |
| Gross Profit: Completed-Contract Method | |
| 2019 through 2021 | |
| Amount | |
| 2019 | $ |
| 2020 | |
| 2021 | |
| Total gross profit | $ |
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