Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2020, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details follow:   2020 2021 Costs incurred during the year $640,000 $1,425,000 Estimated costs to complete, as of December 31   960,000 –0– Billings during the year   420,000   1,680,000 Collections during the year   350,000   1,500,000 Instructions a.    What portion of the total contract price would be recognized as revenue in 2020? In 2021? b.    Assuming the same facts as those above except that Hamilton uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2021? c.    Prepare a complete set of journal entries for 2020 (using the percentage-of-completion method).

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…

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.

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,860,000. The project began in 2021 and was completed in 2022 Data relating to the contract are summarized below: 2021 $ 372,000 $1,899,00e 1,488,eee 524,000 318,eee 2022 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2,336,800 2,542, 000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time occording to percentege of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 ssuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented ot the end of 2021 assuming Nortel recognizes revenue over time according to percentege of completion. 4. Prepare a partial…