Parkersburg, to construct a new city hall. Expected construction 2 years at cost of $120 signed a $160 million contract with the city of million. The city of Parkersburg paid $40 million when the contract was signed, $80 million within the next six months, and the final $40 million exactly one year from the signing of the contract. Parmac incurred $48 million in costs during 2014 and rest in 2015 to complete the contract on time. Using the percentage-of-completion method how much revenue should Parmac recognize in 2014 How much revenue will be recorded in year 2015? CA THE
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Subject: accounting
![In spring 2014, Parmac Engineering Company signed a $160 million contract with the city of
Parkersburg, to construct a new city hall. Expected construction 2 years at cost of $120
million.
The city of Parkersburg paid $40 million when the contract was signed, $80 million within the
next six months, and the final $40 million exactly one year from the signing of the contract.
Parmac incurred $48 million in costs during 2014 and rest in 2015 to complete the contract on
time. Using the percentage-of-completion method how much revenue should Parmac
recognize in 2014
How much revenue will be recorded in year 2015?
O64 million
96 million
48 million
72 million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a8374e2-0c11-468f-938f-bf163a68d0f0%2Fb36494b4-c12c-49d0-ba95-449ce71d6ddf%2Frlxhma9_processed.jpeg&w=3840&q=75)
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- On January 1, 2018 The Village of Port Jefferson engaged to Frog Construction company to construct amunicipal office complex. The three-year a to receive 10 million in cash payments from the city in threeinstallments: 25% when the project was 30% complete; 25% when the project was 60% complete; and50%when the project was fully complete. The contract required that Frog's completion estimates be certifiedby an independent consultant before payments were made.During the first year of the contract, Frog completed 30% of the contract and incurred costs of 2,490,000.During the second year, the project was certified as being 60% complete and Frog incurred costs of3,100,000.During the third year, Frog completed the project and incurred costs of 3,110,000.Assuming Frog had no other revenues or expenses, determine the profit on construction for 2018, 2019,and 2020 under the following methods: A. Percentage Calculation B. Completed ContractPharoah, Inc. began work on a $6,909,000 contract in 2025 to construct an office building. During 2025, Pharoah, Inc. incurred costs of $1,791,800, billed its customers for $1,174,000, and collected $1,035,000. At December 31, 2025, the estimated additional costs to complete the project total $3,478,200. Prepare Pharoah's 2025 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Construction in Process Materials, Cash, Payables (To record costs incurred.) Accounts Receivable Billings on Construction in Process (To record billings.) cash Accounts Receivable (To record collections.) Construction in Process Construction Expenses Revenue from Long-Term…Starks firm wanted to construct a new parking lot and storage area and for that reason they signed a 5 Million contract with Lannister company limited. The work began during March 2022 and the project was completed by the end of 2024. You have the following notes related to each year: Year 1: at the end of 2022 the estimated total cost for the contract was 4,000,000 in which one quarter incurred by the end of 2022. The company billed the contractor with 30%(70% of billed amount was collected during the year) Year 2: at the end of 2023 total estimated cost increased by 30 % from last year estimations and the company's cost to date were 3 Million. The company billed the contractor with 70% in both years (year 1 and year2) (70% of billed amount was collectedduring year 1 and year 2) Year 3: the company finished the contract with total cost of 5.4 Million. The remaining of unbilled revenues was billed during the last year and only 5% remained uncollected.
- In early 2024, Beertender Company entered into a long term contract to construct abridge for Notsosober County for $10 million. The bridge will take three years tocomplete. In 2024, Beertender spent $2.8 million on the project, recognized $3.5million in revenue and $0.7 million in profit. In 2025, Beertender spent $4.2 million onthe project, recognized $3.8 million in revenue and a $0.4 million loss. Beertenderbilled Notsosober $3.0 million in 2024 and $4.5 million in 2025. Notsosober paidBeertender $2.6 million in 2024 and $4.3 million in 2025. Beertender Companyrecognizes revenue on all contracts over time by using the cost to cost ratio. 1. When preparing its December 31, 2024 balance sheet, Beertender would report thefollowing with regards to this contract: Current Assets of $3.9 million, and Current Liabilities of $3.0 million. Current Assets of $6.5 million, and no Current Liabilities. Current Assets of $3.9 million, and no Current Liabilities. Current Assets of $0.9…Sandhill Inc. began work on a $8,900,000 non-cancellable contract in 2023 to construct an office building. During 2023, Sandhill incurred costs of $1,672,000, billed its customers for $1,450,000 (non-refundable), and collected $900,000. At December 31, 2023, the estimated future costs to complete the project totalled $2,728,000. Prepare Sandhill's 2023 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation (To record cost of construction) (To record progress billings) (To record collections) (To record revenues) (To record construction expenses) Debit CreditIn 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows: Cost incurred during the year $ 2,016,000 $ 2,808,000 $ 2,613,600 Estimated costs to complete as of year-end 5,184,000 2,376,000 0 Billings during the year 2,180,000 2,644,000 5,176,000 Cash collections during the year 1,890,000 2,500,000 5,610,000 Westgate recognizes revenue over time according to percentage of completion. 4. Compute the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) Cost incurred during the year $ 2,016,000 $ 3,890,000 $ 3,290,000…
- On January 1, 2017, the City of Hastings created a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.2 million plus an additional $700,000 for postclosure work. Of these totals, the city must pay $50,000 on December 31 of each year for preliminary closure work. At the end of 2017, the landfill reached 3 percent of capacity. At the end of 2018, the landfill reached 9 percent of capacity. Also at the end of 2018, a reassessment is made; total closure costs are determined to be $1.4 million rather than $1.2 million.a. Assuming that the landfill is viewed as an enterprise fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements?b. Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements?c. Assuming that the landfill is…On January 1, 2017, the City of Hastings created a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.2 million plus an additional $700,000 for postclosure work. Of these totals, the city must pay $50,000 on December 31 of each year for preliminary closure work. At the end of 2017, the landfill reached 3 percent of capacity. At the end of 2018, the landfill reached 9 percent of capacity. Also at the end of 2018, a reassessment is made; total closure costs are determined to be $1.4 million rather than $1.2 million. Assuming that the landfill is viewed as an enterprise fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements? Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements? Assuming that the landfill is viewed…Castro Construction signs a contract to build a hotel. The construction is scheduled to begin on January 1, 2016 and is estimated to take four years to complete. Castro expects that its total cost for this project would be $108 million and charges its client $151 million in total. Based on the given actual costs incurred, complete the following table showing the percentage of completion, revenue recognized and gross profit for each year. Assume the company uses the percentage-of-completion method for revenue recognition. Do not enter dollar signs or commas in the input boxes. Round all numbers to 1 decimal place. Costs Revenue Percentage of Completion Year Gross Profit* Incurred* Recognized* 2016 $12.96 % $ 2017 $28.08 % 2018 $36.72 2019 $30.24 Total $108.00 % *The numbers are in million dollars. %24 %24 %24 %24 %24 %24 %24 %24
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