On April 1, 2025, Sandhill Inc. entered into a cost plus fixed fee contract to construct an electric generator for Sweet Acacia Corporation. At the contract date, Sandhill estimated that it would take 2 years to complete the project at a cost of $2,060,000. The fixed fee stipulated in the contract is $468,000. Sandhill appropriately accounts for this contract under the percentage-of-completion method. During 2025, Sandhill incurred costs of $762,200 related to the project. The estimated cost at December 31, 2025, to complete the contract is $1,297,800. Sweet Acacia was billed $584,000 under the contract. Prepare a schedule to compute the amount of gross profit to be recognized by Sandhill under the contract for the year ended December 31, 2025. (If an amount reduces the account balance then enter with negative sign., e.g. -45 or parentheses e.g. (45).) SANDHILL INC.
On April 1, 2025, Sandhill Inc. entered into a cost plus fixed fee contract to construct an electric generator for Sweet Acacia Corporation. At the contract date, Sandhill estimated that it would take 2 years to complete the project at a cost of $2,060,000. The fixed fee stipulated in the contract is $468,000. Sandhill appropriately accounts for this contract under the percentage-of-completion method. During 2025, Sandhill incurred costs of $762,200 related to the project. The estimated cost at December 31, 2025, to complete the contract is $1,297,800. Sweet Acacia was billed $584,000 under the contract. Prepare a schedule to compute the amount of gross profit to be recognized by Sandhill under the contract for the year ended December 31, 2025. (If an amount reduces the account balance then enter with negative sign., e.g. -45 or parentheses e.g. (45).) SANDHILL INC.
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 19RE
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