Intermediate Accounting: Reporting and Analysis
2nd Edition
ISBN: 9781285453828
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 17, Problem 16RE
16 (a)
To determine
Compute the total estimated costs for the contract.
(b)
To determine
Compute the amount of revenue to date.
(c)
To determine
Compute the amount of gross profit recognized.
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1. In 20x1, Electrified Construction Co. enters into a contract to construct a building for a customer. Electrified identifies its performance obligation to be satisfied over time. Electrified measures its progress on the contract based on costs incurred. The contract price is P20M. Electrified has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows:
20x1 20x2 20x3
a. contract cost incurred per yr. 8,160,000 7,320,000 1,920,000
b. billings per year 10,000,000 7,000,000 3,000,000
c. collections on billings per year 9,500,000 6,650,000 3,850,000
d. estimated costs to complete 8,840,000 1,720,000
(at each yr. end)
a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2 and 20x3, respectively.
b. Provide the journal entries under (i) traditional accounting and (ii) PFRS…
In 20x1, ABC Co. enters into a contract to construct a building
for a customer. ABC identifies its performance obligation to be
satisfied over time. ABC measures its progress on the
contract based on costs incurred. The contract price is
P20,000,000. ABC has an unconditional right to all billings
made in accordance with the billing schedule stated in the
contract. Information on the construction is as follows:
20x1
20x2
20x3
Contract costs incurred
per year
Billings per year
Collections on billings
per year
1,920,000
3,000,000
5,650,000 3,850,000
8,160,000 7,320,000
10,000,000
500,000 6600,000
Estimated costs to
complete (at each
year-end) from the Student Ha8,840,000 1,720,000
ons, quizzes
rection
with any academic work, abetting of the same: 1st violation
How much profit is recognized on the contract in 20x3?
In 20x1, ABC Co. enters into a contract to construct a building
for a customer. ABC identifies its performance obligation to be
satisfied over time. ABC measures its progress on the
contract based on costs incurred. The contract price is
P20,000,000. ABC has an unconditional right to all billings
made in accordance with the billing schedule stated in the
contract. Information on the construction is as follows:
20x1
20x2
20x3
Contract costs incurred
per year
Billings per year
Collections on billings
per year
Estimated costs to
8,160,000 7,320,000
1,920,000
10,000,000 7,000,000 3,000,000
9,500,000 6,650,000 3,850,000
complete (at each
year-end)
8,840,000 1,720,000
How much profit is recognized on the contract in 20x3?
Chapter 17 Solutions
Intermediate Accounting: Reporting and Analysis
Ch. 17 - Prob. 1GICh. 17 - Prob. 2GICh. 17 - When a company recognizes revenue during a period,...Ch. 17 - Prob. 4GICh. 17 - Prob. 5GICh. 17 - What is the proper accounting for a wholly...Ch. 17 - If a seller enters into more than one contract...Ch. 17 - Prob. 8GICh. 17 - Prob. 9GICh. 17 - Prob. 10GI
Ch. 17 - Prob. 11GICh. 17 - Prob. 12GICh. 17 - Prob. 13GICh. 17 - Prob. 14GICh. 17 - Prob. 15GICh. 17 - Prob. 16GICh. 17 - If the standalone selling price of a good or...Ch. 17 - Prob. 18GICh. 17 - Prob. 19GICh. 17 - If the sellers performance creates on asset (e.g.,...Ch. 17 - Describe input and output methods used to measure...Ch. 17 - Prob. 22GICh. 17 - Prob. 23GICh. 17 - Prob. 24GICh. 17 - Prob. 25GICh. 17 - A company should recognize revenue when a. the...Ch. 17 - A contract between one or more parties creates: a....Ch. 17 - Morgan Company and its customer agree to modify...Ch. 17 - Chlorine Corp. has a contract to deliver pool...Ch. 17 - Prob. 5MCCh. 17 - Prob. 6MCCh. 17 - In accounting for a long-term construction...Ch. 17 - Prob. 8MCCh. 17 - Prob. 9MCCh. 17 - Prob. 10MCCh. 17 - CustomTee Inc. contracts with various customers to...Ch. 17 - Yankee Corp. agrees to provide Albany Company 24...Ch. 17 - Prob. 3RECh. 17 - Prob. 4RECh. 17 - Prob. 5RECh. 17 - Prob. 6RECh. 17 - VolleyElite runs a volleyball program consisting...Ch. 17 - Enterprise Solutions Inc. licenses its...Ch. 17 - Prob. 9RECh. 17 - Magical Memories sells Florida theme park vacation...Ch. 17 - Prob. 11RECh. 17 - Robotics Inc. contracts with a customer to build a...Ch. 17 - CoolShoes sells its elite tennis shoes to sports...Ch. 17 - Using the information in RE17-13, what journal...Ch. 17 - GameDay sells recreational vehicles along with...Ch. 17 - Prob. 16RECh. 17 - Using the information provided in RE17-16, prepare...Ch. 17 - Prob. 18RECh. 17 - Prob. 19RECh. 17 - Prob. 1ECh. 17 - Prob. 2ECh. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Assume the same facts as in E17-5. On July 1,...Ch. 17 - Prob. 7ECh. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - Jonas Consulting enters into a contract to provide...Ch. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 15ECh. 17 - Prob. 16ECh. 17 - Prob. 17ECh. 17 - Prob. 18ECh. 17 - Prob. 19ECh. 17 - Prob. 20ECh. 17 - Crazy Computer Store sells a back-to-school bundle...Ch. 17 - Each of the following is an independent situation...Ch. 17 - Prob. 23ECh. 17 - Prob. 24ECh. 17 - Prob. 25ECh. 17 - Prob. 26ECh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5PCh. 17 - Prob. 6PCh. 17 - Prob. 7PCh. 17 - SoccerHawk Merchandise Inc. enters into a 6-month...Ch. 17 - Prob. 9PCh. 17 - Prob. 10PCh. 17 - Prob. 11PCh. 17 - Prior to ASU 2014-09 changing the principles...Ch. 17 - The first step in the revenue recognition process...Ch. 17 - Prob. 3CCh. 17 - One of the more difficult issues that companies...Ch. 17 - Prob. 5CCh. 17 - Prob. 6CCh. 17 - Prob. 7CCh. 17 - Prob. 8CCh. 17 - Revenue for a company is recognized for accounting...Ch. 17 - Prob. 10C
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