At the beginning of 2009, Florida Road Construction entered into a contract to build a road for the government. Construction will take four years. Th e following information as of 31 December 2009 is available for the contract: Total revenue according to contract $10,000,000 Total expected cost $ 8,000,000 Cost incurred during 2009 $ 1,200,000 Assume that the company estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2009? A . None.

At the beginning of 2009, Florida Road Construction entered into a contract to build a road for the government. Construction will take four years. Th e following information as of 31 December 2009 is available for the contract: Total revenue according to contract $10,000,000 Total expected cost $ 8,000,000 Cost incurred during 2009 $ 1,200,000 Assume that the company estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2009? A . None.

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 10C

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At the beginning of 2009, Florida Road Construction entered into a contract to build a road for the government. Construction will take four years. Th e following information as of 31 December 2009 is available for the contract: Total revenue according to contract $10,000,000 Total expected cost $ 8,000,000 Cost incurred during 2009 $ 1,200,000 Assume that the company estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2009? B . $300,000.
At the beginning of 2021, Batangas Road Construction entered into a contract to build a road for the government. Construction will take four years. The following information as of December 31, 2021 is available for the contract: Total revenue according to contract 10,000,000 Total expected cost 8,000,000 Cost incurred during 2021 1,200,000 Assume that the company estimated percentage complete based on costs incurred as a percentage of total estimated costs. Under the completed contract method, how much revenue will be reported in 2021? None 300,000 1,500,000
At the beginning of 2021, Florida Road Construction entered into a contract to build a road for the government. Construction will take four years. The following information as of December 31, 2021 is available: Revenue according to contract 10,000,000 Total expected cost 8,000,000 Cost incurred during 2021 1,200,000 Cost incurred during 2022 2,400,000 Cost incurred during 2023 Cost incurred during 2024 1,600,000 2,800,000 Compute for the reported Gross Profit of Florida using: Year 2021 2022 2023 2024 Completed Contract Method Zero Profit Method Percentage of Completion Method
The XYZ Construction Company was awarded a contract for $3,150,000 to build a new building XYZ estimates the cost to complete the contract at $2,700,000. The contract period was 36 months starting January 1, 2010. XYZ uses the cost to cost method of recognizing revenues under the percent of completion method. A schedule of construction activities for the years 2010-2012 follows: Yr. Costs incurred to date Est cost to complete Billings Collection 2010 1,225,000 1,475,000 1,415,000 1,300,000 2011 2,240,000 410,000 1,000,000 1,130,000 2012 2,640000 0 735,000 720,000 Calculate XYZ's gross profit for each year (2010, 2011, and 2012).
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
On January 1, 2021. Robredo Co. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year 12/31/2021 12/31/2022 12/31/2023 P 3740000 Costs incurred during the year Realized gross profit/(loss) during the year Percentage of completion as of the end of the year ? ? P750,000 (P250,000) (P800,000) 50% 37.5% ? What is the balance of Construction in Progress on December 31, 2023?
In 2021, Cupid Construction Co. (CCC) began work on a two-year fixed price contract project. CCC recognizes revenue over time according to percentage of completion for this contract, and provides the following information (dollars in millions): Accounts receivable, 12/31/2021 (from construction progress billings) $ 37.5 Actual construction costs incurred in 2021 $ 135 Cash collected on project during 2021 $ 105 Construction in progress, 12/31/2021 $ 207 Estimated percentage of completion during 2021 60 % How much cash remains to be collected by CCC on the project?
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows: Cost incurred during the year $ 2,016,000 $ 2,808,000 $ 2,613,600 Estimated costs to complete as of year-end 5,184,000 2,376,000 0 Billings during the year 2,180,000 2,644,000 5,176,000 Cash collections during the year 1,890,000 2,500,000 5,610,000 Westgate recognizes revenue over time according to percentage of completion. 4. Compute the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) Cost incurred during the year $ 2,016,000 $ 3,890,000 $ 3,290,000…
Shepard Construction Company has consistently used the percentage-of-completion method. On January 10, 2008, Shepard began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract: Income recognized on December 31, 2008 P 300,000Cost incurred, January 10, 2008 through December 31, 2009 1,800,000Estimated cost to complete at December 31, 2009 600,000 How much income should Shepard recognized for the year ended December 31, 2009 a. 150,000b. 262,000c. 300,000d. 450,000
Assume that Ivanhoe Construction Company has a non-cancellable contract to construct a $4,600,000 bridge at an estimated cost of $4,140,000. The contract is to start in July 2023, and the bridge is to be completed in October 2025. The following data pertain to the construction period. Assume that progress billings are non-refundable. Costs to date (12/31) Estimated costs to complete (12/31) Progress billings during the year Cash collected during the year Contract price Estimated total cost Estimated gross profit Estimated loss 2023 $1,035,000 3,105,000 *$2,980,800+$1,676,700 955,000 788,000 2025 $2,980,800 $4,657,500 1,676,700 2024 The revised estimates for the bridge contract are as follows. 2,443,000 1,801,000 2023 Original Estimates 2024 Revised Estimates $4,600,000 $4,600,000 4,140,000 4,657.500* $460,000 1,202,000 2,011,000 0 $(57,500)
Egay Construction Corporation contracted with the province of Pampanga to construct a bridge at a contract price of P16,000,000. Egay Corporation expects to earn P1,520,000 on the contract. The percentage of completion method is to be used and the completion stage is to be determined by estimates made by the engineer. The following schedule 'summarizes the activities of the contract for years x0-x2. Estimate Cost to Cost Year Incurred х0 P4,600,000 4,500,000 5,250,000 xl x2 Engineer's Estimate of Complete P9,640,000 5,100,000 -0- x0 a. P545,600; b. P545,600; Billings Completion 31% 71 58% 100% 60 *A 10% retainer accounts for the difference collections. between billings and br Under the percentage of completion method, using the engineer's estimate as the measure of completion to be applied to revenues and costs, how much is the gross profit earned each year?id x1 x2 P 498,400; P 606,000 P1,044,000; c. P1,760,000; P6,400,000; d. P1,760,000; P1,800,000; Collection on Contract on Billings…
Ube Construction Company has consistently used the percentage of completion. On January 10, 2007, Ube began work on a P 6,000,000 construction contract. At the inception date, the estimated cost of construction was P 4,500,000. The following relate to the progress of the contract: Income recognized at 12/31/2007 P 600,000 Costs incurred 1/10/2007 through 12/31/2008 3,600,000 Estimated cost to complete at 12/31/2008 1,200,000 How much income should Ube recognize for the year ended December 31, 2001? P 300,000 P 525,000 P 600,000 P 900,000