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- GinebraCorporation recognizes construction revenue and cost using the percentage of completion method. During 2021, a single long-term project was begun which continued through 2021. Information on the project follows: 2021. 2022 Partial billing on contract 1,000,000. 4,200,000 Accounts receivable 1,000,000 3,000,000 Construction cost 1,050,000 1,920,000 Construction in progress 1,220,000 3,640,000 What is the gross profit recognized from this long-term construction contract in year 2021 and 2022, respectively? 2021 2022 A.220,000. 2,280,000 B.170,000. 500,000 C.220,000. 1,000,000 D.170,000. 1,280,000Blue Construction Corp. began operations in 2023. Construction activity for 2023 is shown below. Blue uses the completed-contract method. Contract 1 2 3 Contract Price $1288000 1443400 1321000 Billings Through 12/31/23 $1270000 601000 787000 Collections Through 12/31/23 $1045000 402000 722000 Costs to 12/31/23 $880000 329000 current liability contract asset/liability, $94000 current asset contract asset/liability, $49000 current asset contract asset/liability, $143000 O accounts receivable, $787000 930000 Estimated Costs to Complete $758000 485000 Which of the following should be shown on the statement of financial position at December 31, 2023 related to Contract 3?Question 6 Using completed-contract method: Record the journal entries for ACE corporation for 2001, 2002, and 2003 Record the partial balance sheet for 2003 for just the Asset section in a A. B. suitable format ACE Construction Corporation Contract Price: $1,500,000 2002 $1,350,000 $1,360,000 460,000 575,000 555,000 2001 2003 $1,365,000 Costs incurred during the current year Estimated costs to complete at year-end 1,000,000 Progress billings during year Collections on billings during the year 300,000 270,000 625,000 675,000
- Current Attempt in Progress Sandhill Construction Company uses the percentage-of-completion method of accounting. In 2025, Sandhill began work under contract #E2-D2, which provided for a contract price of $2,159,000. Other details follow: Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year 2025 $571,320 1,015,680 415,000 349,000 2026 $1,446,000 -0- 1,639,000 1,505,000Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below:2018 2019Costs incurred during the year $ 300,000 $ 1,575,000Estimated costs to complete as of 12/31 1,200,000 –0–Billings during the year 380,000 1,620,000Cash collections during the year 250,000 1,750,000Required:1. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortelrecognizes revenue over time according to percentage of completion1. In accounting for a long-term construction contracts, using percentage-of-completion (over time) method, the amount of construction in progress account: a. Is the same with the total revenue recognized. b. Is equal to the gross profit for the year plus the actual cost incurred. c. Total contract price multiplied by the percentage of completion. d. All of the choices 2. A franchisor, charges an initial franchise fee of P920,000, with P200,000 paid when the agreement is signed and the balance in five annual payments. The present value of the future payments, discounted at 10% is P545,872. Franchise operations already started and no future services are required to be performed. The amount of revenue from franchise fees is?
- Problem 1. Jhun Co. recognizes construction revenues and expenses using the percentage of completion method. During 2019, a single long-term contract was started, which continued through the year 2020. Information the project follows: 2019 2020 P 100,000 105,000 122,000 Account receivable on contract P 300,000 Construction expense Construction in progress 192,000 364,000 Partial billings on contract 100,000 420,000 Profit recognized in 2019 should be? Profit recognized in 2020 should be?CHAIN PROBLEM In 2020, MYIESHA Construction began work on a 3-year contract. The contract price was P 6,000,000. MYIESHA uses the percentage-of-completion method/over time for financial accounting purposes. The financial statement presentation relating to this contract at December 31, 2020 was as follows: BALANCE SHEET Accounts receivable-construction contracts 129,000 Construction in progress 390,000 Less: Contract Billings 369,000 Cost of uncompleted contract in excess of billings 21,000 INCOME STATEMENT Gross profit (before tax) recognized in 2020 109,200 Enter the letter of your answer. Use capital letters only. 1. How much was collected in 2020? А. 21,000 B. 129,000 C. 240,000 D. 369,000 2. What is the percentage of completion for the year ended? A. 6.5% B. 13% C. 28% D. 100% 3. What was the initial estimated gross profit on the contract? A. 109,200 B. 280,800 С. 390,000 D. 1,680,000 Please refer to the picture below to answer the question.For a construction firm using the cost recovery method, if costs exceed billings on some contracts by P1,000,000 and billings exceed costs by P800,000 on others, the contracts should ordinarily be reported as a a. Current asset of P1,000,000 and a current liability of P800,000 b. current asset of 200,000
- Current Attempt in Progress Sandhill Construction Company uses the percentage-of-completion method of accounting. In 2025, Sandhill began work under contract #E2-D2, which provided for a contract price of $2,159,000. Other details follow: Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year (a) Revenue recognized in 2025 Revenue recognized in 2026 eTextbook and Media $ $ 2025 Search $571,320 1,015,680 415,000 What portion of the total contract price would be recognized as revenue in 2025? In 2026? (Do not round intermediate calculations.) 349,000 2026 a $1,446,000 -0- 1,639,000 1,505,000 ✔The Leto Construction Company began work on a $15,000 contract on 1/1/22. Planned completion was in 2024. The Percentage-of Completion method is used. Given the following at 12/31/22: Costs incurred to date Estimated costs to complete Billings to date Collections to dato December 31, 2022 $2,500 9,500 4,000 3,800 The balance sheet location and the net amount of the 12/31/22 Combined CIP and Billings accounts are: Select one: a. Current Liability of $1,500 O b. Current Liability of $200 O c. Current Asset of $1,500 d. Current Liability of $875The Nick Construction Company uses the percentage completion method to record long-term contracts. Information for the most recent years is shown below. 2019 2020 2021 Costs incurred to date 300,000 900,000 1,600,000 Estimated Costs to complete 1,200,000 700,000 0 Billings to date 250,000 800,000 2,000,000 Collections to date 175,000 700,000 2,000,000 Required: Prepare the journal entries for 2019 and 2020 necessary to record