A construction company entered into a fixed-price contract to build an office building for $20 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the yearwere $9 million. The building was completed during the second year. Construction costs incurred during the second year were $10 million. How much revenue, cost, and gross profit will the company recognize in the firstand second year of the contract applying the cost recovery method that is required by IFRS?

Winett Corporation is considering an investment in special-purpose equipment to enable the company to obtain a four-year municipal contract. The equipment costs $291,000 and would have no salvage value when the contract expires at the end of four years. Estimated annual operating results of the project are as follows. Revenue from contract sales Expenses other than depreciation Depreciation (straight-line basis) Increase in net income from contract work $211,000 72,750 All revenue and all expenses other than depreciation will be received or paid in cash in the same period as recognized for accounting purposes. Compute the following for Winett's proposal to undertake this contract. a. Payback period b. Return on average investment c. Net present value $308,000 283,750 $ 24,250 a. Payback period. b. Return on average investment. (Round your percentage answer to 1 decimal place (i.e., 0.123 to be entered as 12.3).) c. Net present value of the proposal to undertake contract work,…

(Recognition of Profit on Long-Term Contract) Shanahan Construction Company has entered into a contract beginning January 1, 2017, to build a parking complex. It has been estimated that the complex will cost $600,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $900,000. The following data pertain to the construction period.   2017 2018 2019 Costs to date $270,000 $450,000 $610,000 Estimated costs to complete 330,000 150,000 –0– Progress billings to date 270,000 550,000 900,000 Cash collected to date 240,000 500,000 900,000 Instructions(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period.(b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period.

On February 1, 2023, Sandhill Contractors agreed to construct a building at a contract price of $3,460,000. The total estimated construction costs would be $1,890,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: Total costs incurred to date Estimated costs to complete Customer billings to date Collections to date 2023 Gross profit/ (loss) 689,850 1,200,150 1,100,000 1,000,000 2023 2024 573050 $1,162,000 $ 2,365,000 913,000 1,890,000 1,750,000 2025 Calculate the gross profit / (loss) that should be recognized for 2023, 2024, and 2025 using the percentage completion method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round percentage complete to 1 decimal place, e.g. 15.2% and final answers to O decimal places, e.g. 5,125.) 2024 -0- 3,460,000 2,950,000 -107450 $ LA 2025 40450

Star Construction Corporation has a contract to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 20×5. Actual costs were in line with estimated costs for 20×5 and 20×6. In 20×7, actual costs exceeded estimated costs by $150,000. Total construction costs incurred in each year were as follows: 20X5: $2,700,00020X6: $4,500,00020X7: $1,800,000 Progress billings based on the amount of work completed were collected each year. Star Construction uses the percentage-of-completion method. The percentage-of-completion is based on costs incurred compared with estimated total costs of the project. Company also billed the client and collected the following payments Year Billings Payments Received 20X5: $2,300,000 $2,100,000 20X6: $4,900,000 $4,700,000 20X7: $3,750,000 $4,150,000…

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Lark Corp. appropriately determined that each of its long-term projects represents a single performance obligation that is satisfied over time. At the end of the current year, Lark estimates that its costs to complete a project exceed the contract price, so that an overall loss on the contract is anticipated. Required:   What journal entry will Lark record at the end of the current year, given the following information?   • Revenue to date is $350,000 ($175,000 of which is to be recognized in the current year). • The expense recognized previously was $100,000. • An overall loss of $30,000 is anticipated

A construction company entered into a fixed-price contract to build a soccer stadium for $15,000,000. Construction costs incurred during the first year were $3,675,000, and estimated costs to complete at the end of the year were $6,825,000. The company recognizes revenue over time according to percentage of completion.                     Fixed-price contract amount: $15,000,000        Construction costs incurred in first year: $3,675,000        Estimated costs to complete at end of first year: $6,825,000                  How much revenue and gross profit or loss will appear in the company’s income statement in the first year of the contract?           Percentage of completion at end of first year         Revenue         Gross profit (loss)                                                 Nothing in this area will be graded, but it will be submitted with your assignment.

Oriole Construction Company began operations on January 1, 2025. During the year, Oriole Construction entered into a contract with Winds Corp. to construct a manufacturing facility. At that time, Oriole estimated that it would take 5 years to complete the facility at a total cost of $4.484,000. The total contract price for construction of the facility is $5,972,000. During the year, Oriole incurred $1,082,400 in construction costs related to the construction project. The estimated cost to complete the contract is $4,329,600. Winds Corp. was billed and paid 25% of the contract price. (a) Prepare schedules to compute the amount of gross profit to be recognized for the year ended December 31, 2025, and the amount to be shown as "costs and recognized profit in excess of billings" or "billings in excess of costs and recognized profit" at December 31, 2025, under each of the following methods. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses…

A construction company entered into a fixed-price contract to build an office building for $42 million. Construction costs incurred during the first year were $12 million, and estimated costs to complete at the end of the year were $28 million. The company recognizes revenue over time according to percentage of completion. How much revenue and gross profit or loss will appear in the company's income statement in the first year of the contract? Note: Enter your answers in whole dollars and not in millions (i.e., $4 million should be entered as $4,000,000). Revenue