Question

Constructing and Assessing Income Statements Using Percentage of Completion On March 15, 2017, Frankel Construction is contracted to build a shopping center at a contract price of $120 million. The schedule of expected (equals actual) cash collections and contract costs follows Year Cash Collections Cost Incurred 2017 2018 2019 $30 million 15 million 50 million40 mlion 40 million 30 million Total $120 million 85 million Calculate the amount of revenue, expense, and income for each of the three years 2017 through 2019 using (1) the percentage-of-completion method, and (2) the completed contract method. (Round your answers to the nearest million dollar.) (1) Percentage-of-Completion Method 2017 Revenue$ 17 X million Expense $ 5 million ncome $ 5 X million

Answer 1

E4 1 1) percentage of completion method total contract costs contract price $ 85 $120 2017 2018 2019 cost incurred in year 15 6 % of completion in each year 18% | 47% | 35% 2017 2018 2019 $21 $ 56 $ 42 revenue expense income 10 15 $6 $ 16 $ 12 12 13 14 15 16

for formulas and calculations, refer to the image below -

EA 1) percentage of completion method 4 total contract costs 85 2017 2018 2019 30 contract price 120 cost incurred in vear 15 % of completion in each year I-F5/$CS4-G5/$CS4 |3H5/$C$4 2017 2018 2019 revenue expense income F5 H5 13 14 15 16