Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000. The project began...

Question

Question

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below: 2019 2018 356,000 $2,135,000 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 1,424,000 475,000 1,760, 000 278,000 1,820,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortel recognizes revenue over time according to percentage of completion.

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

	2018	2019
Total cost to be incurred	356000+1424000=1780000	2135000
% of completion [total cost incurred till date /total cost to be incurred]	356000/1780000 .20 or 20%	2135000/2135000 100%
Gross profit	2700000-1780000=920000	2700000-2135000=565000

Revenue	[2700000*.20]-0 540000	[2700000*100%]-540000 2700000-540000 2160000
gross profit to be recognized	[920000*20%]- 0 184000-0 184000	[565000*100%]- 184000 565000-184000 381000

**Revenue recognized = [contract price * % of completion] - revenue previously recognized

**gross profit recognized = [ total gross profit *% of completion ] - gross profit previously recognized

Add a comment

Answer 2

Similar Homework Help Questions

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000. The project began...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022 Costs incurred during the year $ 356,000 $ 2,135,000 Estimated costs to complete as of 12/31 1,424,000 0 Billings during the year 475,000 1,760,000 Cash collections during the year 415,000 1,820,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in...
Requirement 3 please Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000....

Requirement 3 please Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below: 2018 356,000 $2,135,000 2019 Costs incurred during the year Estinated costs to complete as of 12/31 illings during the year Cash collections during the year 1,424,000 475, 000 1,760,000 278,000 1,820,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized...
Only requirement 2 please. Thank you Assume Nortel Networks contracted to provide a customer with Internet...

Only requirement 2 please. Thank you Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below 2018 2019 Costs incurred during the year Estinated costs to complete as of 12/31 Billings during the year Cash collections during the year $356,000 $2,135,000 1.424,000 475,000 1,760,000 278,000 1,820,000 Required: 1. Compute the amount of revenue and gross profit or loss to...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began...

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 2019 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year $ 300,000 1,575,000 1,200,000 380,000 1,620,000 250,000 1,750,000 Required 1. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and...
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,910,000. The project began...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,910,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022 Costs incurred during the year $ 376,000 $ 2,265,000 Estimated costs to complete as of 12/31 1,504,000 0 Billings during the year 535,000 1,810,000 Cash collections during the year 500,000 1,845,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in...
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,300,000. The project began...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,300,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022 Costs incurred during the year $ 324,000 $ 1,800,000 Estimated costs to complete as of 12/31 1,296,000 0 Billings during the year 410,000 1,680,000 Cash collections during the year 310,000 1,780,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,450,000. The project began...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,450,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022 Costs incurred during the year $ 336,000 $ 1,870,000 Estimated costs to complete as of 12/31 1,344,000 0 Billings during the year 446,000 1,710,000 Cash collections during the year 361,000 1,795,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in...
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,650,000. The project began...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,650,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022 Costs incurred during the year $ 352,000 $ 2,025,000 Estimated costs to complete as of 12/31 1,408,000 0 Billings during the year 470,000 1,750,000 Cash collections during the year 405,000 1,815,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in...
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,500,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized b...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,500,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below: 2018 2019 Costs incurred during the year $ 340,000 $ 1,940,000 Estimated costs to complete as of 12/31 1,360,000 0 Billings during the year 451,000 1,720,000 Cash collections during the year 270,000 1,800,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2.250,000. The project began...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2.250,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2022 $1,720,000 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2021 $ 320,000 1,280,000 405,000 300,000 1,670,000 1,775,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and...

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,700,000. The project began...

Homework Answers