INTERMEDIATE ACCOUNTING
10th Edition
ISBN: 9781264397921
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 6, Problem 6.26Q
To determine
Asset: Assets refer to the resources owned by the business, which are utilized in the course of the business to generate revenue.
Liability: Liabilities include the claims of the creditors on the assets of the business. The liability is the obligation of the business.
To explain: The manner in which the billings on construction contract is reported in the
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
For long-term construction projects, the amount of “billings” is reported in the balance sheet by:
Multiple Choice
netting it against “construction in progress.”
adding it to “construction in progress.”
adding it to “accounts receivable.”
netting it against “accounts receivable.”
which of the following items does accounts receivable include
a. money paid for labor and received for services
b. accounts receivable aging report
c. state unemployment insurance
d. overhead should include costs directly associated with a particular project, such
a material and specific projects payroll
In accounting for a long-term construction contract using the percentage of completion method, the progress billings on contract account is a *
A. noncurrent liability
B. revenue account
C. contra noncurrent liability
D.contra current asset account
Chapter 6 Solutions
INTERMEDIATE ACCOUNTING
Ch. 6 - What are the five key steps a company follows to...Ch. 6 - What indicators suggest that a performance...Ch. 6 - What criteria determine whether a company can...Ch. 6 - We recognize service revenue either at one point...Ch. 6 - What characteristics make a good or service a...Ch. 6 - Prob. 6.6QCh. 6 - What must a contract include for the contract to...Ch. 6 - How might the definition of probable affect...Ch. 6 - When a contract includes an option to buy...Ch. 6 - Prob. 6.10Q
Ch. 6 - Prob. 6.11QCh. 6 - Is a customers right to return merchandise a...Ch. 6 - Prob. 6.13QCh. 6 - Under what circumstances should sellers consider...Ch. 6 - When should a seller view a payment to its...Ch. 6 - What are three methods for estimating stand-alone...Ch. 6 - When is revenue recognized with respect to...Ch. 6 - In a franchise arrangement, what are a franchisors...Ch. 6 - When does a company typically recognize revenue...Ch. 6 - Prob. 6.20QCh. 6 - Prob. 6.21QCh. 6 - Prob. 6.22QCh. 6 - Must bad debt expense be reported on its own line...Ch. 6 - Explain the difference between contract assets,...Ch. 6 - Explain how to account for revenue on a long-term...Ch. 6 - Prob. 6.26QCh. 6 - Prob. 6.27QCh. 6 - Timing of revenue recognition LO53 Estate...Ch. 6 - Allocating the transaction price LO54 Sarjit...Ch. 6 - Existence of a contract LO5-5 Tulane Tires wrote...Ch. 6 - Prob. 6.6BECh. 6 - Prob. 6.7BECh. 6 - Performance obligations; warranties LO55 Vroom...Ch. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - Variable consideration LO56 Leo Consulting enters...Ch. 6 - Prob. 6.16BECh. 6 - Prob. 6.17BECh. 6 - Prob. 6.18BECh. 6 - Prob. 6.19BECh. 6 - Prob. 6.20BECh. 6 - Prob. 6.21BECh. 6 - Estimating stand-alone selling prices: expected...Ch. 6 - Estimating stand-alone selling prices; residual...Ch. 6 - Prob. 6.24BECh. 6 - Prob. 6.25BECh. 6 - Contract assets and contract liabilities LO58...Ch. 6 - Long-term contract; revenue recognition over time;...Ch. 6 - Prob. 6.34BECh. 6 - Long-term contract; revenue recognition upon...Ch. 6 - Long-term contract; revenue recognition; loss on...Ch. 6 - Prob. 6.1ECh. 6 - Allocating transaction price LO54 Video Planet...Ch. 6 - Prob. 6.4ECh. 6 - Prob. 6.6ECh. 6 - Prob. 6.7ECh. 6 - Prob. 6.9ECh. 6 - Variable considerationmost likely amount; change...Ch. 6 - Variable considerationexpected value; change in...Ch. 6 - Prob. 6.12ECh. 6 - Prob. 6.13ECh. 6 - Prob. 6.14ECh. 6 - Approaches for estimating stand-alone selling...Ch. 6 - FASB codification research LO56, LO57 Access the...Ch. 6 - FASB codification research LO58 Access the FASB...Ch. 6 - Long-term contract; revenue recognition over time;...Ch. 6 - Prob. 6.1PCh. 6 - Prob. 6.2PCh. 6 - Prob. 6.3PCh. 6 - Prob. 6.5PCh. 6 - Variable consideration; change of estimate LO53,...Ch. 6 - Prob. 6.7PCh. 6 - Prob. 6.8PCh. 6 - Prob. 6.10PCh. 6 - Long-term contract; revenue recognition over time...Ch. 6 - Prob. 6.1DMPCh. 6 - Judgment Case 52 Satisfaction of performance...Ch. 6 - Judgment Case 53 Satisfaction of performance...Ch. 6 - Prob. 6.5DMPCh. 6 - Prob. 6.7DMPCh. 6 - Prob. 6.9DMPCh. 6 - Prob. 6.10DMPCh. 6 - Prob. 6.12DMPCh. 6 - Prob. 6.13DMPCh. 6 - Prob. 6.14DMPCh. 6 - Prob. 6.15DMPCh. 6 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 1. WHAT IS LONG-TERM CONSTRUCTION CONTRACTS? ELABORATE AND GIVE EXAMPLES OF LOCAL CONSTRUCTION CONTRACTS. DISCUSS THE ACCOUNTING STANDARDS GOVERNING IT. 2. WHAT ARE THE CONSIDERATIONS TO RECOGNIZE ONE AS ADDITIONAL CONTRACT REVENUE? GIVE SOME EXAMPLES OF ADDITIONAL CONTRACT REVENUES. 3. WHAT ARE THE VARIETY OF MEANS A STAGE OF COMPLETION CAN BE ESTIMATED? 4. HOW SHALL THE CONTRACTOR PRESENT IN ITS STATEMENT OF FINANCIAL STATEMENTS THE ACCOUNTS RELATED TO CONSTRUCTION CONTRACT? 5. WHEN THE COMPANY DECIDES TO CHANGE ITS ACCOUNTING FOR CONSTRUCTION CONTRACTS FROM PERCENTAGE OF COMPLETION TO COST RECOVERY METHOD. HOW SHALL THE ACCOUNTING CHANGE BE TREATED?arrow_forwardDavid Mendez Under the percentage-of-completion method, how should the balances of progress billings and construction in process be disclosed in the financial statements prior to the completion of the contract? net, as income from construction if a credit balance, and loss from construction if a debit balance progress billings as deferred income, construction in progress as a deferred expense net, as a current asset if a debit balance, and a current liability if a credit balance progress billings as income, construction in process as inventoryarrow_forwardUsing the percentage-of-completion method, prepare schedules to compute theprofit or loss to be recognized as a result of this contract and all the necessaryjournal entriesarrow_forward
- Demonstrate revenue recognition for long-term contracts, both at a point intime when the contract is completed and over a period of time according to thepercentage completed.arrow_forwardExplain how to account for revenue on a long-term contract over time as opposed to at a point in time. Under what circumstances should revenue be recognized at the point in time a contract is completed?arrow_forwardIt is client's main obligation to pay the contractor in consideration of the execution and completion of the works by contractor. There are three (3) types of payments, namely Advance Payment, Interim Payment and Final Payment. Explain the following below: i) ii) The term of Final Payment. Effects of Final Payment.arrow_forward
- Answer the following: a. Give at least five examples of revenue from contracts to customer. b. What are the effect of unclassified accounts in the financial statements to the stakeholdersarrow_forwardWhat amount of RGP should be reported for the current year if the percentage of completion method is used for all contracts?arrow_forwardIdentify the proper accounting for losses on long-term contracts.arrow_forward
- example of Payroll report for project ?arrow_forwardWhich of the following costs shall from part of contract costs of long-term construction contract? a. General administration costs for which reimbursement is not specified in the contract b. Research and development costs for which reimbursement is not specified in the contract c. Construction overheads including costs such as the preparation and processing of construction personnel payroll. d. Selling costs such as broker’s commissionarrow_forwardWhen the outcome of a construction contract cannot be estimated reliably, how shall contract revenue and contract costs associated with the construction contract be recognized? Group of answer choices They shall be recognized as revenue and expenses respectively by reference to the state of completion of the contract activity at the end of the reporting period also known as by percentage of completion method. They shall be recognized as revenue and expenses respectively by the date of earning of revenue or incurring of expenses also known as accrual method. They shall be recognized as revenue and expenses respectively by reference to the percentage of collection of receivables from customers also known as by installment method. Revenue shall be recognized only to the extent of contract cost incurred that is probable will be recoverable and the contract cost shall be recognized as an expense in the period in which there are incurred also known as cost recovery or zero-profit…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning