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 $4,060,000. 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 Required: At 12-31-2024 10% $ 360,000 3,240,000 721,000 At 12-31-2025 $ 2,562,000 1,708,000 2,190,000 At 12-31-2026 60% 100% $ 4,321,000 0 4,060,000 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 recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized 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 the balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 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 recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign. Req 1 Show less A Req 2 Year Gross Profit (Loss) Recognized ("Upon Completion") Gross Profit (Loss) Recognized ("Over Time") 2024 2025 2026 Total project profit (loss) $ < Req 1 and 2 0 $ Req 3 > 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 $4,060,000. 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
Required:
At 12-31-2024
10%
$ 360,000
3,240,000
721,000
At 12-31-2025
$ 2,562,000
1,708,000
2,190,000
At 12-31-2026
60%
100%
$ 4,321,000
0
4,060,000
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 recognition over time.
2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to
be recognized 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 the balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs.
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Req 3
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 recognition over time. 2. Assuming Curtiss recognizes revenue over time according
to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.
Req 1
Show less A
Req 2
Year
Gross Profit (Loss) Recognized
("Upon Completion")
Gross Profit (Loss) Recognized
("Over Time")
2024
2025
2026
Total project profit (loss)
$
< Req 1 and 2
0
$
Req 3 >
0
Transcribed Image Text: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 $4,060,000. 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 Required: At 12-31-2024 10% $ 360,000 3,240,000 721,000 At 12-31-2025 $ 2,562,000 1,708,000 2,190,000 At 12-31-2026 60% 100% $ 4,321,000 0 4,060,000 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 recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized 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 the balance sheet at the end of 2024 and 2025 as either cost in excess of billings or billings in excess of costs. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 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 recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign. Req 1 Show less A Req 2 Year Gross Profit (Loss) Recognized ("Upon Completion") Gross Profit (Loss) Recognized ("Over Time") 2024 2025 2026 Total project profit (loss) $ < Req 1 and 2 0 $ Req 3 > 0
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