Please dont give solutions image based thanx 562 QUESTION: ACCOUNTING FOR LONG-TERM CONTRACTS3748291013455Steadfast Construction Ltd. builds apartment buildings & uses the percentage of completion methodfor revenue recognition. Information on a $2.8 million three-year construction contract is as follows:202120222023Costs incurred to date (at Dec 31)500,000 $1,125,000 $1,825,000$1,500,000 $ 875,000 $Estimated costs to complete (at Dec 31)Progress billings during the year (non-refundable $ 650,000 $1,200,000 $950,000Collections during the year450,000 $1,025,000 $1,150,000$Required:$1. Calculate the gross profit that should be recognized in 2022.2. Prepare the journal entrties that should be recorded for 2022.Note: Journal Entries for 2021 and 2023 are NOT required.

Accounting for long-term contracts is the one where we recognize revenue and costs associated with a…

Steadfast Construction Ltd. builds apartment buildings & uses the percentage of completion method for revenue recognition. Information on a $2.8 million three-year construction contract is as follows: $ $ Costs incurred to date (at Dec 31) Estimated costs to complete (at Dec 31) Progress billings during the year (non-refundable $ Collections during the year $ 2021 2022 2023 500,000 $1,125,000 $1,825,000 1,500,000 $ 875,000 $ 650,000 $1,200,000 $ 950,000 450,000 $1,025,000 $1,150,000

Steadfast Construction Ltd. builds apartment buildings & uses the percentage of completion method for revenue recognition. Information on a $2.8 million three-year construction contract is as follows: $ $ Costs incurred to date (at Dec 31) Estimated costs to complete (at Dec 31) Progress billings during the year (non-refundable $ Collections during the year $ 2021 2022 2023 500,000 $1,125,000 $1,825,000 1,500,000 $ 875,000 $ 650,000 $1,200,000 $ 950,000 450,000 $1,025,000 $1,150,000

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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2 During 20xl, Cord Builders, Inc. started work on a P9,000.00 fixed-price construction contract. Cord appropriately uses the percentage-of-completion method in accounting for the contract. Cord's accounting records disclosed the following 20x1 20x2 Cumulative contract costs incurred 6.300,000 8,100,000 3,900,000 Estimated total costs at completion 7,800,000 How much are the revenue and cost of construction recognized 20x2, respectively? a. 2,220,000; 2,150,000 b. 2,520,000; 2,400,000 (AICPA-Adapted) c. 2,520,000; 2,420,000 d. 2,500,000; 2,400,000
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