Req 1 and 2Req 3Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown inthe balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.Balance Sheet (Partial)Current assets:Costs less loss in excess of billingsCurrent liabilities:Billings in excess of costs and profit2021< Req 1 and 22022Req 3 > Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-storyoffice building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The totalcontract price for construction of the building is $4,000,000. The building was completed on December 31, 2023. Estimatedpercentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings toAxelrod under the contract were as follows:Percentage of completionCosts incurred to dateEstimated costs to completeBillings to Axelrod, to dateReq 1 and 2Complete this question by entering your answers in the tabs below.Req 3At 12-31-2021 At 12-31-202210%$ 350,0003,150,000720,000$2,500,0001,700,0002,170,000Year202120222023Total project profit (loss)Required:1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that thecontract does not qualify for revenue recognition over time.2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to berecognized in each of the three years.3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in thebalance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.$60%< Req 1 and 2At 12-31-20231. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes thatthe contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time accordingto percentage of completion, compute gross profit or loss to be recognized in each of the three years. (Leave no cells blank -be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.)0 $Req 1Req 2Gross Profit (Loss) Recognized Gross Profit (Loss) Recognized("Upon Completion")("Over Time")$0 $100%$4,250,0004,000,000Req 3 >050,00050,000Show less

Revenue is recognized under a construction contract at different stages as agreed in the contract.…

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-stor 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 $4,000,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings t Axelrod under the contract were as follows:

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-stor 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 $4,000,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings t Axelrod under the contract were as follows:

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 9MC

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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…
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