1. During 2020, Bay Construction started a new construction job with a contract price of $750 million. Bay has a 12/31 fiscal year end. Bay has determined that the contract does not qualify for revenue recognition over time. The contract was completed on 12/31/22 with the following information ($ in millions): Costs incurred in the period (paid in cash) Estimated costs to complete at 12/31 Billings on contract in the period Cash collected in the period 2020 180.0 2021 2022 432.0 150.0 540.0 153.0 -0- 150 350 250 200 400 150 What is the amount of gross profit (loss) on the contract that Bay would recognize on the Income Statement in 2020, 2021 and 2022? You must show supporting work (calculations/explanations) to receive credit for your answers. Gross Profit (Loss) 2020 2021 2022

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1. During 2020, Bay Construction started a new construction job with a contract price of $750 million.
Bay has a 12/31 fiscal year end. Bay has determined that the contract does not qualify for revenue
recognition over time. The contract was completed on 12/31/22 with the following information ($ in
millions):
Costs incurred in the period (paid in cash)
Estimated costs to complete at 12/31
Billings on contract in the period
Cash collected in the period
2020
180.0
2021
2022
432.0
150.0
540.0
153.0
-0-
150
350
250
200
400
150
What is the amount of gross profit (loss) on the contract that Bay would recognize on the Income
Statement in 2020, 2021 and 2022? You must show supporting work (calculations/explanations) to
receive credit for your answers.
Gross Profit (Loss)
2020
2021
2022
Transcribed Image Text:1. During 2020, Bay Construction started a new construction job with a contract price of $750 million. Bay has a 12/31 fiscal year end. Bay has determined that the contract does not qualify for revenue recognition over time. The contract was completed on 12/31/22 with the following information ($ in millions): Costs incurred in the period (paid in cash) Estimated costs to complete at 12/31 Billings on contract in the period Cash collected in the period 2020 180.0 2021 2022 432.0 150.0 540.0 153.0 -0- 150 350 250 200 400 150 What is the amount of gross profit (loss) on the contract that Bay would recognize on the Income Statement in 2020, 2021 and 2022? You must show supporting work (calculations/explanations) to receive credit for your answers. Gross Profit (Loss) 2020 2021 2022
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