E18-18 (Long-Term Contract Reporting) Berstler Construction Company began operations in 2012. Con- struction activity for the first year is shown below. All contracts are with different customers, and any work remaining at December 31, 2012, is expected to be completed in 2013. Project 123 Total Contract Price $ 560,000 670,000 520,000 $1,750,000 Billings through 12/31/12 $360,000 220,000 500,000 $1,080,000 Cash Collections through 12/31/12 $340,000 210,000 440,000 $990,000 Contract Costs Incurred through 12/31/12 $450,000 126,000 330,000 $906,000 Estimated Additional Costs to Complete $130,000 504,000 -0- $634,000 Instructions Prepare a partial income statement and balance sheet to indicate how the above information would be

E18-18 (Long-Term Contract Reporting) Berstler Construction Company began operations in 2012. Con- struction activity for the first year is shown below. All contracts are with different customers, and any work remaining at December 31, 2012, is expected to be completed in 2013. Project 123 Total Contract Price $ 560,000 670,000 520,000 $1,750,000 Billings through 12/31/12 $360,000 220,000 500,000 $1,080,000 Cash Collections through 12/31/12 $340,000 210,000 440,000 $990,000 Contract Costs Incurred through 12/31/12 $450,000 126,000 330,000 $906,000 Estimated Additional Costs to Complete $130,000 504,000 -0- $634,000 Instructions Prepare a partial income statement and balance sheet to indicate how the above information would be

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 26E

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M5-13. Computing Revenues under Long-Term Contracts Camden Corporation agreed to build a warehouse for a client at an agreed contract price of $900,000. Ex- pected (and actual) costs for the warehouse follow: 2016, $202,500; 2017, $337,500; and 2018, $135,000. The company completed the warehouse in 2018. Compute revenues, expenses, and income for each year 2016 through 2018, and for all three years combined, using the cost-to-cost method.
Blue Construction Corp. began operations in 2023. Construction activity for 2023 is shown below. Blue uses the completed-contract method. Contract 1 2 3 Contract Price $1288000 1443400 1321000 Billings Through 12/31/23 $1270000 601000 787000 Collections Through 12/31/23 $1045000 402000 722000 Costs to 12/31/23 $880000 329000 current liability contract asset/liability, $94000 current asset contract asset/liability, $49000 current asset contract asset/liability, $143000 O accounts receivable, $787000 930000 Estimated Costs to Complete $758000 485000 Which of the following should be shown on the statement of financial position at December 31, 2023 related to Contract 3?
CHAIN PROBLEM In 2020, MYIESHA Construction began work on a 3-year contract. The contract price was P 6,000,000. MYIESHA uses the percentage-of-completion method/over time for financial accounting purposes. The financial statement presentation relating to this contract at December 31, 2020 was as follows: BALANCE SHEET Accounts receivable-construction contracts 129,000 Construction in progress 390,000 Less: Contract Billings 369,000 Cost of uncompleted contract in excess of billings 21,000 INCOME STATEMENT Gross profit (before tax) recognized in 2020 109,200 Enter the letter of your answer. Use capital letters only. 1. How much was collected in 2020? А. 21,000 B. 129,000 C. 240,000 D. 369,000 2. What is the percentage of completion for the year ended? A. 6.5% B. 13% C. 28% D. 100% 3. What was the initial estimated gross profit on the contract? A. 109,200 B. 280,800 С. 390,000 D. 1,680,000 Please refer to the picture below to answer the question.
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below:2018 2019Costs incurred during the year $ 300,000 $ 1,575,000Estimated costs to complete as of 12/31 1,200,000 –0–Billings during the year 380,000 1,620,000Cash collections during the year 250,000 1,750,000Required:1. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortelrecognizes revenue over time according to percentage of completion
In 20x1, XYZ Company enters into a construction contract with a customer. The contract price is P10,000,000.Information on the contract follows:20X1 20X2 20X3Contract costs incurred during the year P2,645,132 P236,451 P2,657,000Estimated costs to complete 2,697,451 2,116,777 -Progress Billings 5,000,000 3,000,000 2,000,000Collections on progress billings 2,000,000 4,000,000 4,000,000Using the cost-to-cost method, compute the following: Note: Use up to two (2) decimal places in presenting the answer for percentage of completion. Use six (6)decimal places when applying the percentage.7. Realized gross profit in 20x2 _____________8. The balance of "Contract Liability" at the end of 20x2 _____________9. Revenue that should be recognized in 20x3 _____________10. Realized gross profit in 20x3
In 20x1, XYZ Company enters into a construction contract with a customer. The contract price is P10,000,000.Information on the contract follows:20X1 20X2 20X3Contract costs incurred during the year P2,645,132 P236,451 P2,657,000Estimated costs to complete 2,697,451 2,116,777 -Progress Billings 5,000,000 3,000,000 2,000,000Collections on progress billings 2,000,000 4,000,000 4,000,000 Using the cost-to-cost method, compute the following: Note: Use up to two (2) decimal places in presenting the answer for percentage of completion. Use six (6)decimal places when applying the percentage.4. Balance of "Contract Liability" at the end of 20x1 _____________5. Percentage of completion for 20x2 _____________6. Revenue that should be recognized in 20x2 _____________
In 20x1, XYZ Company enters into a construction contract with a customer. The contract price is P10,000,000.Information on the contract follows:20X1 20X2 20X3Contract costs incurred during the year P2,645,132 P236,451 P2,657,000Estimated costs to complete 2,697,451 2,116,777 -Progress Billings 5,000,000 3,000,000 2,000,000Collections on progress billings 2,000,000 4,000,000 4,000,000 Using the cost-to-cost method, Note: Use up to two (2) decimal places in presenting the answer for percentage of completion. Use six (6)decimal places when applying the percentage.1. Percentage of completion for 20x1 _____________2. Revenue that should be recognized in 20x1 _____________3. Realized gross profit in 20x1 _____________4. Balance of "Contract Liability" at the end of 20x1 _____________
Arab Construction Company began work in 2021 on contract XXXX, which provided for a contract price of €19,200,000. Other details follow: 2021 Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year OA €1,200,000. B. €1,600,000. C. €4,800,000. €3,200,000 9,600,000 3,600,000 2,400,000 Assume that Arab uses the percentage-of-completion method of accounting. The portion of the total gross profit to be recognized as income in 2021 is D. €6,400,000 €9,800,000 0 14,400,000 15,600,000 202 GUR OM
The Puff and Stuff Company is involved in a three-year long-term contract. The following data relate to this contract: 2016 2017 2018 Total Contract Price $ 200,000 Costs incurred each year $ 24,000 $ 56,000 $ 30,000 $ 110,000 Costs incurred to date $ 24,000 $ 80,000 $ 110,000 Estimated cost to complete $ 96,000 $ 40,000 $ - Partial billings each year $ 50,000 $ 112,000 $ 38,000 Cash collected from billings $ 35,000 $ 120,000 $ 45,000 Required: Prepare the journal entries for each of the following assuming Puff and Stuff satisfies its performance obligation. 2016 Entries a. Construction costs for the year b.…
n January 1, 2021, ABC enters into a contract to construct a building for a customer. ABC identifies its performance obligation to satisfied over time. ABC uses the input method based on costs to measure its progress on the contract. The contract price is P9M Information on the construction is provided below: 2021 2022 2023 a. Contract cost incurred per year 2,760,000 3,540,000 500,000 b. Billing per year 50% 25% 25% c. Collections on billings per year d. Estimated costs to complete (at each yr. end) 4,140,000700,000 90% 90% balance Note: Billings per year are stated as percentages of the contract price. The contract is non-cancellable. The collection on billings in 2021 and 2022 are net of 10% retention. "Retention" is an amount withheld by the contracted and payable to the contractor at the end of the contract when the project is completed and accepted. Requirements; a. Compute for the gross profits, 2021 2022 2023
The Leto Construction Company began work on a $12.000 contract on 1/1/20. Planned completion was in 2022. The Percentage-of Completion method a used Given the following December 31 2021 $4.200 6,300 5,100 6,000 2020 2022 $11,650 $2,500 Costs incumed to dute Esbinated costs to compiete Bitingu to date Collections to date 7,600 4.000 3,800 12,000 11,900 The 12/31/21 belance of Construction in Progress is Select one O. $4300 Ob S5040 O $5.000 Od $4200 O $4800
Exercise 18A-29 (Part Level Submission) Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2014, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,376,000. Other details follow: Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year i Total contract price (a) Your answer is incorrect. Try again. What portion of the total contract price would be recognized as revenue in 2014? In 2015? 2014 2015 SHOW LIST OF ACCOUNTS 2014 $691,200 1,036,800 453,600 378,000 LINK TO TEXT 2015 $1,539,000 -0- 1,814,400 1,620,000 2376000 2376000 By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor.