Shumpert, Inc., entered into a contract that was to take two years to complete, with an estimated cost of $900,000. The contract price was $1,300,000. Costs of the contract for 2019, the first year, totaled $675,000. What was the gross profit reported by the percentage of completion method for 2019? After the contract was completed at the end of 2020 at a total cost of $950,000, what was the gross profit reported by the percentage of completion method for 2020?

Novak, Inc. began work on a $ 6,466,000 contract in 2020 to construct an office building. During 2020, Novak, Inc. incurred costs of $ 1,547,340, billed its customers for $ 1,085,000, and collected $ 1,013,000. At December 31, 2020, the estimated additional costs to complete the project total $ 3,003,660.Prepare Novak’s 2020 journal entries using the percentage-of-completion method

Telephone Limited signed a contract with Machinery Leasing Company at 1st January 2020 to lease a machine. The agreement consists in 10 equal annual payments of $300,000 at the beginning of each year with an interest rate of 15%. The yearly rental payment includes $30,000 of executory costs related to insurance on the machine. The executory costs of $30,000 are paid to the lessor each year. There is an option to purchase the machine at the end of the lease term for $50,000. The machine has an estimated useful life of 14 years and a guaranteed residual value of $20,000. Both companies adopt straight-line depreciation method for all items of PPE. Consider a PVIF (n=10, i=15%) of 0.2472 and PVIFA (n=10, i=15%) of 5.0188. The balance day for Telephone Limited and Machinery Leasing Company is 31 of December. Required(Round all numbers to the nearest dollar) a)  Discuss the nature of this lease to Telephone Limited. b)  Discuss the nature of this lease to Machinery Leasing Company. c)…

LMAO Company uses percentage of completion method in accounting for its long-term contracts. During 2019, it started work on a P10,000,000 project. At that time, LMAO estimated that it would take 3-4 years to complete the project. In 2019, the outcome of the project cannot be estimated reliably but in 2020, LMAO was already certain the project is estimated to cost P8,000,000. As of December 31, 2019, costs incurred amounts to P3,175,000. This amount includes P200,000 costs of materials stored in the warehouse intended for the next stage of construction the following year. The engineers' estimate of construction costs at completion is P8,500,000. LMAO billed the client 30% of the contract price and collected the same amount. In 2020, LMAO incurred P3,575,000 more and billed the customer P3,300,000. At the end of the year, the estimated cost to complete is still P2,250,000. How much is the Gross Income in 2020?*

Oriole 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 $2050000 each quarter. The total contract price is $18222000 and Oriole estimates total costs of $17100000. Oriole estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2021, Oriole estimates that it is 20% complete with the construction, based on costs incurred.At December 31, 2022, Oriole Construction estimates that it is 70% complete with the building; however, the estimate of total costs to be incurred has risen to $17300000 due to unanticipated price increases. What is the total amount of Construction Expenses that Oriole will recognize for the year ended December 31, 2022?     $8690000   $8325600   $12110000   $8465600

Curtiss Construction Company, Incorporated, entered into a fixed-price contract with Axelrod Associates on July 1, 2024, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,480,000. The building was completed on December 31, 2026. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2024 At 12-31-2025 $367,000 3,303,000 728,000 $ 2,856,000 1,904,000 2,330,000 Ren 1 and 2 10% Dan 3 60% Answer is not complete. Complete this question by entering your answers in the tabs below. Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three…

Indiana Co. began a construction project in 2018 with a contract price of $162 million to be received when the project is completed in 2020. During 2018, Indiana incurred $33 million of costs and estimates an additional $85 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. Suppose that, in 2019, Indiana incurred additional costs of $64 million and estimated an additional $51 million in costs to complete the project. Indiana (Do not round your percentage calculated): Multiple Choice Recognized $3.00 million loss on the project in 2019. Recognized $6.13 million gross profit on the project in 2019. Recognized $3.13 million loss on the project in 2019. Recognized $3.13 million gross profit on the project in 2019.

On April 12, 2021, Jacob’s Construction contracted to build a 400 Unit Apartment Complex at a contract price of $85 million. The schedule of expected (which equals actual) cash collections and contract direct costs (excluding SG&A) is as follows: Year Cash Collections Cost Incurred 2021 $60 million $ 45 million 2022  20 million   27 million Total $80 million $72 million   Calculate the Gross Profit for the Total Contract   Calculate the Gross Margin for the Total Contract       Calculate the revenue for 2021     Calculate the revenue for 2022       Calculate the gross profit for 2021     Calculate the gross profit for 2022       Calculate the gross margin for 2021     Calculate the gross margin for 2022

On April 1, 2025, Sandhill Inc. entered into a cost plus fixed fee contract to construct an electric generator for Sweet Acacia Corporation. At the contract date, Sandhill estimated that it would take 2 years to complete the project at a cost of $2,060,000. The fixed fee stipulated in the contract is $468,000. Sandhill appropriately accounts for this contract under the percentage-of-completion method. During 2025, Sandhill incurred costs of $762,200 related to the project. The estimated cost at December 31, 2025, to complete the contract is $1,297,800. Sweet Acacia was billed $584,000 under the contract. Prepare a schedule to compute the amount of gross profit to be recognized by Sandhill under the contract for the year ended December 31, 2025. (If an amount reduces the account balance then enter with negative sign., e.g. -45 or parentheses e.g. (45).) SANDHILL INC. Computation of Gross Profit to be Recognized on Uncompleted Contract Year Ended December 31, 2025 Total Contract Price…

Shumpert, Inc., entered into a contract that was to take two years to complete, with an estimated cost of $ 1,348,800. The contract price was $1,888,320. Costs of the contract for 2022, the first year, totaled $1,011, 600. If required, round any division to two decimal places and round your final answers to the nearest dollar. a. What was the gross profit reported by the percentage of completion method for 2022? Sfill in the blank 1 b. After the contract was completed at the end of 2023 at a total cost of $1,416, 240, what was the gross profit reported by the percentage of completion method for 2023? Sfill in the blank 2