Cullumber Enterprises Ltd. has entered into a contract beginning in February 2023 to build two warehouses for Ivanhoe Structures Ltd. The contract is a non-cancellable fixed-price contract for $9.5 million. Billings and collections are lower in 2025 by $500,000 each. The following data pertain to the construction period (all figures in thousands). Costs for the year Estimated costs to complete Progress billings for the year (non-refundable) Cash collected for the year 2023 2024 $4,185 5,115 5,115 388 3,860 4,540 3,300 4,590 1,910 2025 200 -0- 1,100

Lake Construction Company has consistently used the percentage of completion method in recognizing income. During 2021, Lake entered into a fixed-price contract to construct an office building for P10,000,000. Information relating to the contract is as follows: As of December 31 2021 2022 Percentage of completion 20% 60% Estimated total cost at completion P 7,500,000 P 8,000,000 Income recognized (cumulative) 500,00 1,200,000 Contract costs incurred during 2022 were: 3,200,000 3,300,000 3,500,000 4,800,000 Gross profit recognized during 2022 amounted to: 100,000 300,000 600,000 700,000

Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,480,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2024 At 12-31-2025 $367,000 3,303,000 728,000 $ 2,856,000 1,904,000 2,330,000 Ren 1 and 2 10% Dan 3 60% Answer is not complete. Complete this question by entering your answers in the tabs below. Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three…

Cullumber Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed price contract for $2.6 million beginning September 1, 2020, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2022. The following data pertain to the construction period. 2020 2021 2022 Costs to date $816,000 $1,664,400 $2,182,000 Estimated costs to complete 1,584,000 525,600 0 Progress billings to date (non-refundable) 860,000 2,132,000 2,600,000 Cash collected to date 716,000 2,023,000 2,600,000 Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2020 Gross profit/(loss) $ 2021 2022

Dalton Construction Co. contracted to build a bridge for $10,000,000. Construction began in 2021 and was completed in 2022. Data relating to the construction are: Costs incurred during the year Estimated costs to complete Dalton uses the percentage-of-completion method. 2021 $3,300,000 2,700,000 2022 $2,750,000 Instructions (a) How much revenue should be reported for 2021? Show your computation. (b) Make the entry to record progress billings of $4,100,000 during 2021. (c) Make the entry to record the revenue and gross profit for 2021. (d) How much gross profit should be reported for 2022? Show your computation.

On April 12, 2021, Jacob’s Construction contracted to build a 400 Unit Apartment Complex at a contract price of $85 million. The schedule of expected (which equals actual) cash collections and contract direct costs (excluding SG&A) is as follows: Year Cash Collections Cost Incurred 2021 $60 million $ 45 million 2022  20 million   27 million Total $80 million $72 million   Calculate the Gross Profit for the Total Contract   Calculate the Gross Margin for the Total Contract       Calculate the revenue for 2021     Calculate the revenue for 2022       Calculate the gross profit for 2021     Calculate the gross profit for 2022       Calculate the gross margin for 2021     Calculate the gross margin for 2022

Rogers Ltd. has entered into a contract beginning in February 2020 to build two warehouses for ocean Ltd. The contract is a non-cancellable fixed price contract for $9.4 million. The following data pertain to the construction period.     2020   2021   2022 Costs for the year   $3,285,000   4,015,000   1,800,000 Estimated costs to complete   4,015,000   1,825,000   -0- Progress billings for the year (non-refundable)   2,960,000   3,440,000   3,000,000 Cash collected for the year   2,605,000   3,490,000   3,305,000     a) Using the percentage-of-completion method, calculate the percent complete for each year of the contract. b) Calculate the amount of the gross profit to be recognized each year of the contract. c) Prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.) d) 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…

Curtiss Construction Company, Incorporated, entered into a fixed price contract with Axelrod Associates on July 1, 2024, to construct a four story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,240,000 The building was completed on December 31, 2026 Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows Percentage of completion Cests incurred to date Estimated costs to complete Billings to Axelrod, to date Required: At 12-11-2024 10% At 12-31-2025 $2,688,000 1,792,000 AT 12-11-2026 60% 100% $ 4,534,000 4,240,000 $363,000 3,267,000 724,000 2,250,000 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue…

Colorado Inc. constructed a factory during 2020 and 2021 under contract with Pacific Machinery Co. Relevant data are summarized below: Contract price Cost Gross profit Contract billings $3,000,000 2020 1,200,000 2021 600,000 2020 800,000 2021 400,000 2020 1,500,000 2021 1,500,000 Colorado Inc. recognizes revenue over time with respect to this contract. In its December 31, 2020, balance sheet, Colorado would report: ● The contract asset, cost and profit in excess of billings, $500,000. The contract liability, billings in excess of cost, of $300,000. The contract asset, contract amount in excess of billings, of $1,500,000. The contract asset, deferred profit, of $400,000.

SMDC Construction is constructing an office building under contract for Onyx Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of P1,550,000 each quarter. The total contract price is P18,600,000 and SMDC Construction estimates total costs of P17,750,000. SMDC Construction estimates that the building will take 3 years to complete, and commences construction on January 2, 2018.         SMDC Construction completes the remaining 25% of the building construction on December 31, 2020, as       scheduled. At that time the total costs of construction are P18,750,000. What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that SMDC Construction will recognize for the year ended December 31, 2020?          Revenue          Expenses A.  P18,600,000   P18,750,000 B.  P4,650,000     P  4,687,500 C.  P4,650,000     P  5,250,000 D.  P4,687,500     P  4,687,500 Group of answer choices D C B A