Sandhill Construction, which follows ASPE entered into a contract to construct a bridge for a contract price of $2.8 million. Construction began in 2022 and was completed in 2024. Below are the details of the transactions related to the contract: Costs incurred during the year Estimated costs to complete Revenue Expenses Gross Profit $ Calculate the gross profit to be recognized each year using the completed-contract method. $ 2022 2022 $637,000 1,489,000 2023 $844,000 $715,900 713,000 $ 2024 2023 $ 2024 SUPPORT

Sandhill Construction, which follows ASPE entered into a contract to construct a bridge for a contract price of $2.8 million. Construction began in 2022 and was completed in 2024. Below are the details of the transactions related to the contract: Costs incurred during the year Estimated costs to complete Revenue Expenses Gross Profit $ Calculate the gross profit to be recognized each year using the completed-contract method. $ 2022 2022 $637,000 1,489,000 2023 $844,000 $715,900 713,000 $ 2024 2023 $ 2024 SUPPORT

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In 2021, ABC Company agreed to construct a commercial building at a price of P7,500,000. ABC uses the percentage of completion method. The information relating to the costs and billings for the contract were as follows: 2021 2022 2023 Cost P2,100,000 P4,500,000 P5,887,500 incurred to date Estimated 3,900,000 1,500,000 cost to complete 7,500,000 Progress billings to date 1,125,000 3,000,000 Collection 900,000 2,400,000 7,050,000 to date How much is the contract asset (liability) as of December 31, 2022 using View 1 of the PIC? Group of answer choices (P2,625,000) (P1,500,000) P2,625,000 P1,500,000
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1.On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which is estimated to cost P31,200,000. The company recognizes construction revenue over time. Data on this project for 2022-2024 follow:Contract BillingsCosts incurredEst’d Costs to Complete2022 10,500,000 5,460,000 20,540,0002023 12,500,000 9,984,000 13,156,0002024 14,440,000 15,756,000 -The contract contains a penalty clause that penalizes the company a reduction of P70,000 from the contract price for every week of delay. In 2024, the contract was delayed for 8 weeksWhat is the gross profit for 2024?A. 1,164,000 C. 1,724,000B. 1,466,400 D. 1,824,000 2.MOC Construction Company started work on three job sites during the current year. Any costs incurred are expected to be recoverable. Data relating to the three jobs are given below:Site Contract PriceCost IncurredEstimated Costs to CompleteBillings on ContractCollections on Billings1 5,000,000 3,750,000 - 5,000,000 5,000,0002 7,000,000 1,000,000 4,000,000 900,000…
Indiana Company began a construction project in 2024 with a contract price of $162 million to be received when the project is completed in 2026 During 2024 Indiana incurred $35 million of costs and estimates an additional $15 million of costs to complete the project Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed in 2025, Indiana incurred additional costs of $59 milion and estimated an additional $38 million in costs to complete the project indiana Note: Do not round intermediate calculations. Multiple Choice recognized $911 milion gross profe on the project in 2025 recognized $9.00 million gross prefit on the project in 2025 ced $3000 mon gress profe on the project in 2025
Casio Co. recognizes construction revenue and expenses using the percentage-of-completion method. During 2023, a single long-term project was begun, which continued through 2025. Information on the project follows: 2023 $100,000 2024 $300,000 12/31 Accounts Receivable balance 125,000 162,000 Construction expenses for year Gross Profit recognized in year Billings during year 52,000 100,000 100,000 420,000 The 12/31/24 CIP balance is: Select one: a.$139,000 b.$452,000 c.$187,000 d.$152,000 e.$439,000
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,860,000. The project began in 2021 and was completed in 2022 Data relating to the contract are summarized below: 2021 $ 372,000 $1,899,00e 1,488,eee 524,000 318,eee 2022 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2,336,800 2,542, 000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time occording to percentege of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 ssuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented ot the end of 2021 assuming Nortel recognizes revenue over time according to percentege of completion. 4. Prepare a partial…
5) In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 4. Calculate 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.) 2021 2022 2023 Costs incurred…
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 $1,400,000 2025 2026 $3,150,000 $2,695,000 Cost incurred during the year Estimated costs to complete as of year-end 5,600,000 2,450,000 0 Billings during the year 1,000,000 3,550,000 5,450,000 Cash collections during the year 800,000 2,600,000 6,600,000 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.
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 2025 2026 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year $ 2,542,000 5,658,000 2,020,000 $ 3,772,000 1,886,000 4,294,000 $ 2,074,600 0 Cash collections during the year 1,810,000 3,800,000 3,686,000 4,390,000 Westgate recognizes revenue over time according to percentage of completion. 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 incurred). 2-c. In the journal below, complete the necessary journal…
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