2. On February 1, 2023, Marsh Contractors agreed to construct a building at a contract price of$17,400,000. Marsh estimated total construction costs would be $12,000,000 and the projectwould be finished in 2025. Information relating to the costs and billings for this contract is asfollows:Total costs incurred to dateEstimated costs to completeCustomer billings to dateCollections to date2023202420252023$4,500,0007,500,0006,600,0006,000,000InstructionsFill in the correct amounts on the following schedule. For percentage-of-completion accountingand cost-recovery accounting, show the gross profit that should be reported for 2023, 2024, and2025.Percentage-of-CompletionGross Profit202320242024$7,920,00020255,280,00012,000,00010,500,0002025$13,800,000-0-16,800,00016,500,000Cost-RecoveryGross Profit

It must be understand that revenue on contracts must be recognized on proportionate basis under…

2. On February 1, 2023, Marsh Contractors agreed to construct a building at a contract price of $17,400,000. Marsh estimated total construction costs would be $12,000,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: Total costs incurred to date Estimated costs to complete Customer billings to date Collections to date 2023 2024 Instructions Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and cost-recovery accounting, show the gross profit that should be reported for 2023, 2024, and 2025. 2025 2023 $4,500,000 7,500,000 6,600,000 6,000,000 Percentage-of-Completion Gross Profit 2023 2024 2024 $7,920,000 5,280,000 12,000,000 10,500,000 2025 2025 $13,800,000 -0- 16,800,000 16,500,000 Cost-Recovery Gross Profit

2. On February 1, 2023, Marsh Contractors agreed to construct a building at a contract price of $17,400,000. Marsh estimated total construction costs would be $12,000,000 and the project would be finished in 2025. Information relating to the costs and billings for this contract is as follows: Total costs incurred to date Estimated costs to complete Customer billings to date Collections to date 2023 2024 Instructions Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and cost-recovery accounting, show the gross profit that should be reported for 2023, 2024, and 2025. 2025 2023 $4,500,000 7,500,000 6,600,000 6,000,000 Percentage-of-Completion Gross Profit 2023 2024 2024 $7,920,000 5,280,000 12,000,000 10,500,000 2025 2025 $13,800,000 -0- 16,800,000 16,500,000 Cost-Recovery Gross Profit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A quantity of steel in the amount of $423,000.0 is needed for a project, payment due (from contractor to steel fabricator) at the project begin date. The steel is expected to be erected in Month 2 and Month 3, with billing at the end of these months and subsequent payment from the owner (to the contractor) at the end of Month 3 and Month 4. Assume half the the payment occurs at the end of Month 3 and the other half at the end of Month 4. Using an annual interest rate of 18%, which is a monthly interest rate of 1.5%, to finance the purchase with a short-term line of credit loan, determine the total interest accumulated for this steel purchase until payment is received (from the owner).
! Required information [The following information applies to the questions displayed below.] In 2024, 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 2026. Information related to the contract is as follows: 2024 Cost incurred during the year $ 2,156,000 Estimated costs to complete as of year-end 5,544,000 Billings during the year 2,130,000 2025 $3,388,000 2,156,000 3,414,000 2026 $2,371,600 0 4,456,000 Cash collections during the year 1,865,000 3,300,000 4,835,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Revenue Gross profit (loss) 2024 I.. 2025 2026
Sagar
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.
Please help me
Sheridan Construction Company has entered into a contract beginning January 1, 2025, to build a parking complex. It has been estimated that the complex will cost $596,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $902,000. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date Cash collected to date (a) $256,280 339,720 270,000 Gross profit recognized in 2025 Gross profit recognized in 2026 2025 Sok and Media 240,000 Gross profit recognized in 2027 $ GA $ LA 2026 Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter O. Do not leave any fields blank.) 5 $429,120 166,880 555,000 505,000 2027 $606,000 902,000 902.000
Would you please help me understand how my answers are incorrect? I have been looking at this for an hour.Thank you.
36 Construction is constructing an office building under contract for Election Cafe. The contract calls for progress billings and payments of P620,000 each quarter. The total contract price is P7,440,000 and RegisterToVote estimates total costs of P7,100,000. RegisterToVote estimates that the building will take 3 years to complete, and commences construction on January 2, 2020. 36 At December 31, 2020, RegisterToVote estimates that it is 30% complete with the construction, based on costs incurred. What is the total amount of Revenue from Long-Term Contracts recognized for 2020 and what is the balance in the Accounts Receivable account assuming Election Cafe has not yet made its last quarterly payment? Revenue - 2,232,000 ; AR - 620,000 Revenue - 2,130,000 ; AR - 620,000 Revenue - 2,130,000 ; AR - 2,480,000 Revenue - 2,480,000 ; AR - 2,480,000 37At December 31, 2021, RegisterToVote Construction estimates that it is 75% complete with the building; however, the estimate of total costs…
Please assits with this cost accounting question Contract Masters Ltd has entered into a contract with Creative Dealers Ltd. for the construction of a new branch office. The contract began on March 1, 2022 and was completed on December 28 2022. The total value of the contract was $12,000,000. On December 30, 2022, an engineer inspected the project and issued a final certificate for work done. The following information is available with regards to the contract: $Site labour costs 3,120,000 Materials direct to site 2,000,000Materials returned 30,500 Materials from store and workshops 500,000 Maintenance of plant and use 980,000 Direct expenses 1,090,000 General overheads 750,000 Materials…
In 2024, 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 2026. Information related to the contract is as follows: 2024 2025 2026 Cost incurred during the year $ 2,523,000 $ 3,177,000 $ 1,980,000 Estimated costs to complete as of year-end 6,177,000 1,800,000 0 Billings during the year 2,070,000 3,630,000 4,300,000 Cash collections during the year 1,835,000 3,400,000 4,765,000 Westgate recognizes revenue over time according to percentage of completion. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.
In 2024, 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 2026. Information related to the contract is as follows: 2025 Cost incurred during the year. Estimated costs to complete as of year-end Billings during the year 2024 $ 2,059,000 5,041,000 2,190,000 $ 2,627,000 2,414,000 2,496,000 2026 $ 2,655,400 0 5,314,000 Cash collections during the year 1,895,000 2,400,000 5,705,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Revenue Gross profit (loss) 2024 2025 2026
In 2024, 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 2026. Information related to the contract is as follows: 2024 2025 2026 Cost incurred during the year $ 2,184,000 $3,510,000 $2,316, 600 Estimated costs to complete as of year-end 5,616,000 2,106, 000 0 Billings during the year 1,800,000 3,894,000 4,306, 000 Cash collections during the year 1,600,000 3,400,000 5,000,000 Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit" Cash, Materials, etc." for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs…