FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On January 1, 2021, Turnstile Construction Company Inc. contracted to build a medical practice office building for Medicine
Points Inc. for a total contract price of $2,000,000. On January 1, Turnstile estimated that it would take three years to
complete the building. On December 31, 2023, the building was completed. Following are contract costs incurred,
estimated costs to complete the contract, and accumulated billings to Medicine Points Inc. for 2021, 2022, and 2023
At 12/31/21 At 12/31/22 At 12/31/23
Contract costs incurred to date
$ 540,000 $1,600,000
Estimated costs to complete the contract 1,500,000 500,000
Billings to Medicine Inc.
$2,200,000
-0.
300,000 1,400,000 2,000,000
Required: Assuming this contract meets the requirements for recognizing revenue over time, prepare schedules to
compute the profit or loss Turnstile Company would recognize as a result of this contract for the years ended December 31,
2021, 2022, and 2023.
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Transcribed Image Text:On January 1, 2021, Turnstile Construction Company Inc. contracted to build a medical practice office building for Medicine Points Inc. for a total contract price of $2,000,000. On January 1, Turnstile estimated that it would take three years to complete the building. On December 31, 2023, the building was completed. Following are contract costs incurred, estimated costs to complete the contract, and accumulated billings to Medicine Points Inc. for 2021, 2022, and 2023 At 12/31/21 At 12/31/22 At 12/31/23 Contract costs incurred to date $ 540,000 $1,600,000 Estimated costs to complete the contract 1,500,000 500,000 Billings to Medicine Inc. $2,200,000 -0. 300,000 1,400,000 2,000,000 Required: Assuming this contract meets the requirements for recognizing revenue over time, prepare schedules to compute the profit or loss Turnstile Company would recognize as a result of this contract for the years ended December 31, 2021, 2022, and 2023.
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