Pharoah Construction Company enters into a contract with a customer to build a warehouse for $211,000, with a performancebonus of $105,500 that will be paid based on the timing of completion. The amount of the performance bonus decreases by 10% perweek for every week beyond the agreed-on completion date. The contract requirements are similar to contracts that Pharoah hasperformed previously, and management believes that such experience is predictive for this contract. Management estimates thatthere is a 60% probability that the contract will be completed by the agreed-on completion date, a 30% probability that it will becompleted one week late, and a 10% probability that it will be completed two weeks late. whats the tranction pricein probolity weighted method

Seasons Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Seasons estimates total costs of $17,750,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2018. In 2018, it incurs cost of $5,325,000. At December 31, 2019, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $18,000,000 due to unanticipated price increases. What is the cost that Seasons has incurred during the year ended December 31, 2019? Group of answer choices $7,875,000 $8,175,000 $7,987,500 $13,500,000

On July 1, Wiggins Associates enters into a contract to provide consulting services to Pennsylvania University (PU). The contract is anticipated to last four months and is intended to achieve significant cost savings at the university. The contract stipulates that PU will pay Wiggins $32,000 at the end of each month, and, if total cost savings reach a specific target, PU will pay an additional $27,000 to Wiggins at the end of the contract. Wiggins estimates a 80% chance that cost savings will reach the target. Assume that Wiggins estimates uncertain consideration as the most likely amount. Required: Do the following for Wiggins: a. Prepare the journal entry on July 31 to record the first month of revenue under the contract. b. Assuming total cost savings exceed the target, prepare the journal entry, if any, on October 31 to record receipt of the $27,000 bonus (ignore the normal October payment of $32,000). c. Assuming total cost savings do not reach the target, prepare the journal…

A company is accounting for a long-term construction contract where revenue is recognized over time. The project is built to the customer's specifications, and the customer can make changes as construction is ongoing. It is a 3-year, fixed-fee contract that is presently in its first year. The latest reasonable estimates of total contract costs indicate that the contract will be completed at a profit.  The company will submit progress billings to the customer and has reasonable assurance that collections on these billings will be received in each year of the contract. The contract can be canceled at any time by the customer who will retain control of any work done to date. Discuss the following: a. When should revenue from contracts be accounted for overtime versus at a point in time? b. How would the income recognized in each year of this long-term construction contract be determined using the cost-to-cost basis of determining progress toward satisfaction of the performance…

On July 1 Wiggins Associates enters into a contract to provide consulting services to Pennsylvania University (PU). The contract is anticipated to last four months and is intended to achieve significant cost savings at the university. The contract stipulates that PU will pay Wiggins $30.000 at the end of each month, and, if total cost savings reach a specific target. PU will pay an additional $25,000 to Wiggins at the end of the contract Wiggins estimates a 80% chance that cost savings will reach the target Assume that Wiggins estimates uncertain consideration as the most likely amount. Required: Do the following for Wiggins a. Prepare the journal entry on July 31 to record the first month of revenue under the contract b. Assuming total cost savings exceed the target, prepare the journal entry, if any, on October 31 to record receipt of the $25,000 bonus ignore the normal October payment of $30.0001 c. Assuming total cost savings do not reach the target, prepare the journal entry, if…

On July 1, Wiggins Associates enters into a contract to provide consulting services to Pennsylvania University (PU). The contract is anticipated to last four months and is intended to achieve significant cost savings at the university. The contract stipulates that PU will pay Wiggins $27,000 at the end of each month, and, if total cost savings reach a specific target, PU will pay an additional $22,000 to Wiggins at the end of the contract. Wiggins estimates a 70% chance that cost savings will reach the target. Assume that Wiggins estimates variable consideration as the expected value. Required: Prepare the journal entry on July 31 to record the first month of revenue under the contract. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Grouper Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $260,015, and its unguaranteed residual value at the end of the lease term is estimated to be $20,500. National will pay annual payments of $37,300 at the beginning of each year. Grouper incurred costs of $195,000 in manufacturing the equipment and $4,100 in sales commissions in closing the lease. Grouper has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 10%.

We have given the contract to an agency for the value of 17 Cr for the duration of 7 month with the LD clause of 0.5% of total contract price for each week's delay or part thereof, subject to maximum of 5% of total contract price. But agency has completed only 9 Cr in 10 month duration and closed the work, in this case how will calculate the LD amount?

oreca

Kingbird Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $304,659, and its unguaranteed residual value at the end of the lease term is estimated to be $19.400. National will pay annual payments of $40,800 at the beginning of each year. Kingbird incurred costs of $164,100 in manufacturing the equipment and $3,900 in sales commissions in closing the lease. Kingbird has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 8%. Click here to view factor tables. (a) Discuss the nature of this lease in relation to the lessor. This is a sales-type lease Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answers to O decimal places, eg. 5.275) (1) Lease receivable S (2) Sales price S (3) Cost of sales $