Calculate the amount of revenue to be recognized in 2020 and 2021.Calculate the construction costs to be expensed in 2021.Prepare the journal entry at December 31, 2021, to record long-term contract revenues, expenses, and losses for 2021.What is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021?Show how the construction contract would be reported on the SFP and the income statement for the year ended December 31, 2021.Assume that Cullumber uses the zero-profit or completed-contract method. What would be the journal entry recorded on December 31, 2021? Cullumber Enterprises Ltd. has entered into a contract beginning in February 2020 to build two warehouses for Atlantis StructuresLtd. The contract is a non-cancellable fixed price contract for $9.0 million. The following data pertain to the construction period (allfigures in thousands).202020212022Costs for the year$3,3304,0701,800Estimated costs to complete4,0701,850-0-Progress billings for the year (non-refundable)3,0053.4952,500Cash collected for the year2,6452,8103,545

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Calculate the amount of revenue to be recognized in 2020 and 2021.
Calculate the construction costs to be expensed in 2021.
Prepare the journal entry at December 31, 2021, to record long-term contract revenues, expenses, and losses for 2021.
What is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021?
Show how the construction contract would be reported on the SFP and the income statement for the year ended December 31, 2021.
Assume that Cullumber uses the zero-profit or completed-contract method. What would be the journal entry recorded on December 31, 2021?

Cullumber Enterprises Ltd. has entered into a contract beginning in February 2020 to build two warehouses for Atlantis Structures
Ltd. The contract is a non-cancellable fixed price contract for $9.0 million. The following data pertain to the construction period (all
figures in thousands).
2020
2021
2022
Costs for the year
$3,330
4,070
1,800
Estimated costs to complete
4,070
1,850
-0-
Progress billings for the year (non-refundable)
3,005
3.495
2,500
Cash collected for the year
2,645
2,810
3,545

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